Baroness Scotland of Asthal: My Lords, I certainly agree with the noble and learned Lord that we needto do everything we can to reduce reoffending. Restorative justice seems to have a very beneficial effect from the victim's point of view. We are working hard to see whether it can also contribute to reducing the level of reoffending.

Baroness Scotland of Asthal: My Lords, there has been some research, and consistent evidence shows that restorative justice increases victim satisfaction: at least 75 per cent of victims who choose to take part in the restorative justice process are very glad that they did so. The outstanding issue is whether it reducesthe offender's likelihood of reoffending. From the victim's point of view, there is clear evidence that it is very beneficial.

Baroness Scotland of Asthal: My Lords, I do not have the figures with me but I shall be very happy to write to the noble Lord. We try to ask local criminal justice boards to incorporate this approach generally in their work, encouraging participation not justby the champions but by everyone—for example,the corporate alliance, the faith-based alliance and the civic alliance—involving the voluntary sector and the local authorities in these issues too.

Lord Elystan-Morgan: My Lords, does the noble Baroness agree that, as, it seems, three or four years must elapse between the decision to build prison places with Treasury consent and the first prisoner going into such an institution, the short-term solution must turn to some other factor? Will she indicate Home Office policy on the urgency of this matter?

Baroness Scotland of Asthal: My Lords, we are clear that those who are dangerous and violent should go to prison, but that there are good alternatives to imprisonment for those who are not; tough community penalties, which bite on the offending and help people to change.

Lord McKenzie of Luton: My Lords, these amendments and the arguments put forward by the noble Lord are very similar to those that we discussed in Committee, as he acknowledged. The noble Lord, Lord Skelmersdale, wants to ensure that we consider the effects of both physical and mental health conditions when deciding whether a customer is eligible for either employment and support allowance or access to the support group—the tests of limited capability for work and limited capability for work-related activity respectively.
	I will deal with limited capability for work first. Under Clause 8, customers are awarded points depending on the functional effects of physical and mental health conditions. They are determined as having limited capability for work where they score 15 points or more. The details of this are set out in the draft regulations under Clause 8, which were shared with noble Lords before Committee. As noble Lords will recall, and as the noble Lord, Lord Skelmersdale, acknowledged, I announced at Second Reading that we will allow points scores for mental health and physical descriptors to be added together in the Clause 8 assessment. This decision has been reflected in Regulation 3(3) of the draft Clause 8 regulations, which I published for noble Lords.
	The Clause 8 and 9 assessments assess very different concepts in very different ways. Limited capability for work-related activity cannot be based on the Clause 8 points scores, as there is no direct correlation between these scores and whether a person is likely to have limited capability for work-related activity—the purpose of the Clause 9 assessment. Instead, customers are determined as being eligible for the support group where they satisfy one of 46 functional descriptors found in the schedule to the draft regulations under Clause 9. Customers need to meet only one of the 46 descriptors to qualify for entitlement to the support group regardless of whether this relates to physical functioning or mental functioning. We will consider the effects of both physical and mental conditions when considering whether customers meet these functional descriptors. Hence, in carrying out both the assessments under Clauses 8 and 9, we will consider the effects of physical conditions and mental health conditions on a person's functional capability. That is the assurance the noble Lord is seeking.
	During Committee, I also explained that we do not need to make changes to the Bill to allow us to consider both physical and mental conditions in these assessments, as the use of "physical or mental condition" does not limit us to considering these conditions separately. In fact, changing the wording in the Bill to "physical and mental condition", as the noble Lord proposes in his amendment, could be interpreted as meaning that customers would have to have both a physical and mental health condition before they could be determined as having either limited capability for work or limited capability for work-related activity. That is clearly not appropriate and I am sure is not what he wants to happen.
	As I said, our draft regulations set out very clearly our intentions on this matter, and particularly that we will combine physical and mental health scoreswhen determining whether a customer has limited capability for work.
	As noble Lords are aware, the revised PCA is based on the recommendations made by the technical working groups involved in its review, a copy of which was published last September. Following the initial limited evaluation carried out last October, a further and more detailed evaluation is about to start. This will be carried out by the technical working groups, which are independent of the department, but members of the PCA consultative group will also take part. A report of that phase 2 evaluation is due to be published in the summer and copies will be placed in the Library.
	I hope that that gives the noble Lord the assurance that he seeks about our intentions and the fact that there is a process of review under way—and, accordingly, that that will enable him to withdraw his amendment.

Lord McKenzie of Luton: My Lords, I thank the noble Baroness, Lady Thomas, for raising this matter and giving us a chance to debate again an extremely important issue. It gives me an opportunity to make an announcement that will go some way towards addressing the concerns raised by noble Lords.
	The amendment provides a new power to disregard payments received and to ensure that activity undertaken as part of the service-user involvement would not be taken into account in calculating benefit entitlement or payments. The Government recognise the importance and value of encouraging participation in public life and in learning new skills, gaining experience and building confidence. Service-user involvement involves many of the skills and activities in which people routinely engage in everyday employment. Indeed, that could count as part of a person's work-related activity when a requirement is introduced in time.
	The noble Lord, Lord Skelmersdale, asked me to define "work-related activity". I refer him to Clause 12(7) of the Bill, where it is defined in a wide manner:
	"In this Part, 'work-related activity', in relation to a person, means activity which makes it more likely that the person will obtain or remain in work or be able to do so".
	That point has been touched on by a number of speakers. I was interested in what the noble Baroness, Lady Meacher, said about using the foundation trust as an opportunity for people to job-share, to help them to gain confidence and to get closer to employment.
	We are aware of the concerns that have been raised about how current benefit rules can make it difficult to ensure service-user involvement. However, we believe that, in relation to receiving benefits to participate in such activity, the benefit rules provide a fair balance between encouraging participation and creating the correct work incentives, while also protecting the public purse.
	It is important to remember that encouraging people to work, build skills and increase their confidence are the foundations on which ESA is built. Our goal is to help as many people as possible to leave benefit dependency and to support themselves through work, with all the advantages that that brings. As part of this process, we recognise that part-time work can be important to well-being and to developing self-worth, and that it can act as a stepping stone to sustained work off benefits. That is why we have the permitted work rules in incapacity benefit. We think that they serve an important purpose, and so we plan to bring them forward to ESA customers. These rules aim to act as a valuable gateway into the world of work and give claimants the opportunity to explore what kind of work is right for them. Moreover, the permitted work rules are generous and, combined with the voluntary work rules, provide customers with a wide range of opportunities to try out work for themselves.
	We have been looking for more flexible ways of helping people to take up opportunities and to increase their options without fear of their benefits being removed straightaway. One of the advantages of introducing a new, unified benefit is that it provides the opportunity to peel back the complex layers and rebuild, making improvements where we can. We have looked in particular at how the permitted work higher limit, which generally applies only to the contributory benefit, could help more people to try out work. As a result, I can announce today that, within ESA, we will be aligning the existing permitted work higher earnings limit between the contributory and income-related elements of the benefit. This will be a significant step in addressing the issues raised. Anyone claiming ESA will be able to earn up to£86 per week for up to 52 weeks, without it affecting their benefit entitlement. This is an important change, which will provide many more people with the opportunity to realise their aspirations. I am sure that noble Lords will join me in welcoming the change.
	To illustrate the overall impact of the change and how it will be of benefit to many more people, your Lordships may find it helpful if I provide an example. A customer who is receiving income-related ESA would be able to carry out permitted work for up to 16 hours and earn up to £86 per week for up to52 weeks—that is, at existing rates. Currently, a man in similar circumstances on income support would have his benefit removed pound for pound for anything over £20 that he earns. That is a substantial change. At week 40, let us say, the customer's self-esteem and health are such that he feels able to move into sustained full-time work, safe in the knowledge that he will be protected by the generous linking rules and supported not only by his regular wage but by the tax credits system and the return-to-work credit, which provides a generous£40 per week of additional support for 52 weeks if earnings are below £15,000.
	We want to encourage participation in public life and it is right that people should be given the opportunity to help themselves whenever they can. That is why we have recently changed the guidance on applying the incapacity-for-work test to emphasise that, when people take part in service-user involvement, they should not automatically be sent for a reassessment. A reassessment should be done only where there are specific reasons for believing that the work that a customer is doing demonstrates that they no longer satisfy the conditions of entitlement to the benefit. We intend that similar guidance will apply to ESA in future.
	We also believe that people should not be allowed to keep all their benefits while undertaking work or receiving remuneration for other activities, such as paid service-user involvement. That is subject to the rules that I have just outlined. There is an important balance to be struck between income from working in and representing the community, and avoiding duplicate provision from the public purse.
	A number of specific points were raised. The noble Baroness, Lady Thomas, referred to service-user activities not being paid work. We do not agree that that is a helpful distinction. Service-user involvement involves many of the skills and activities in which people routinely engage in their everyday employment. In creating any distinction, we would be dismissing the value of service-user engagement in helping disabled people to feel confidence and to develop skills that will help them to find other types of work. As such, service-user involvement could count as part of a person's work-related activity.

Lord McKenzie of Luton: Yes, my Lords. The local authority councillor test is different because the permitted work rules as they currently operate, and will continue to operate on an expanded basis, state that once you have breached the rules you are out of benefit. The local authority councillor rule will say that, once you have breached the threshold, that is deducted from your benefits. The Government are not proposing to extend those provisions relating to local councillors. I revert to our discussion about work-related activity. I stress that this would need to be judged on a case-by-case basis.
	I shall comment briefly on service users who offer involvement on a voluntary basis having notional earnings attributed to them. My noble friend Lady Hollis touched on them. The notional earnings rules are an important safeguard that help to protect the benefits system from abuse. Customers are already able to undertake a wide range of activity, such as permitted or voluntary work, without their benefit being affected. As I said, we intend to build on that foundation in the ESA. We are looking at ways of modernising the rules to enable customers to make the most of their talents. For example, we have recently clarified the rules on the treatment of lunches provided to volunteers to ensure that they can continue to volunteer and receive benefit in the normal way.
	On the references to rules on expenses, our key aim is to encourage people as much as possible to support themselves through work. We are always concerned about anything that discourages people from taking part in activity, and we will continue to look at how to make the rules more effective. Aligning the permitted work higher earnings limit will play an important part in enabling us to do just that. All changes that we make need to be underpinned by an understanding of the wider effects on earnings rules and work incentives.
	The noble Lord, Lord Oakeshott, asked me about the cost of the amendment. We would have to lookat its consequences and weigh everything up, particularly the impact on work incentives. But I hope that what we have announced today on the permitted work rules will satisfy noble Lords that we have taken a significant step forward.

Lord McKenzie of Luton: My Lords, the amendment is intended to allow people suffering from the most serious conditions and the terminally ill to automatically enter the support group. While I entirely understand the well intentioned motives of the amendment, it undermines a key principle of the new benefit and would help to maintain the concept of incapacity for work, which we are trying to remove. Our reforms are about trying to ensure that as many people as possible have the chance to engage in work. As such, the support group criteria set out in the schedule to the draft regulations for Clause 9 have been drafted to ensure that only people with the most severe levels of functional limitation arising from disabling conditions, which prove that they demonstrate limited capability for work-related activity, will be placed in the support group. The criteria are not based on specific health conditions or disabilities but instead focus on the impact that an individual's health condition or disability has on his ability to function. We strongly believe this is the fairest way of carrying out such an assessment, as different individuals can be affected by conditions in very different ways. We think it only right that we look at each person as an individual, assessing what he can and cannot do and what it is therefore reasonable to expect of him.
	We have, of course, accepted that there are a small number of situations where we need to treat people as having limited capability for work-related activity even though they might not satisfy the descriptors we intend to use to test for it. As such, we have made special provision in our draft regulations for people who are terminally ill, as we do not believe it is reasonableto require a person in the last few months of his life to have to engage in work-related activity in order to receive ESA. We have made provision for people who are receiving the most debilitating forms of cancer therapy. This is because we are confident that they will all experience severe functional limitation during the course of treatment and for a period after it has ended, to the extent that it would be unreasonable to require them to engage in work-related activity—I am not sure whether the noble Lord, Lord Skelmersdale, was suggesting that that judgment might not be right and that we should not put even that group of people into the support group.
	This does not mean that people receiving other forms of treatment will not be given access to the support group. We know that many other forms of treatment, including many other treatments for cancer, can be debilitating for many customers, but they will not be for everyone, which is the fundamental point. That is why, when considering whether someone has limited capability for work-related activity, we want to consider his individual circumstances and the way that his treatment affects his functional ability. Where people suffer from severe functional limitations, they are likely to satisfy one of the 46 support group descriptors and already demonstrate limited capability for work-related activity so that they are placed in the support group. Let us take the example of cancer patients suffering from severe fatigue as a side effect of their treatment. They are highly likely to meet one of the 46 descriptors that we will use to determine limited capability for work-related activity and will therefore be placed in the support group, but we will consider that on a case-by-case basis.
	Meanwhile, draft Regulation 3(2)(c) makes provision to treat people as having limited capability for work-related activity if engaging in such activity would pose a substantial risk to their physical or mental health, even if they do not meet any of the descriptors. As an example, perhaps I can look once more at cancer patients. Many people undergoing cancer treatments can have a significant risk of infection because their immune system can be compromised by their treatments. I know that Macmillan Cancer Support is concerned that asking such people to engage in work-related activity could be seriously damaging to their health. Anybody who is at such serious risk of infection, whatever the cause, will be treated under these provisions as having limited capability for work-related activity and will be placed in the support group. This is again something that we want to consider on the basis of individual circumstances.

Baroness Greengross: moved Amendment No. 8:
	Clause 8, page 6, line 12, leave out "or" and insert "and"

Baroness Greengross: My Lords, I shall also speak to the other amendments in the group up to Amendment No. 35. The amendments would not necessarily result in any changes to the current draft regulations or implementation of these welfare reforms; they would simply make provision to widen the scope of the assessment process in the future. An assessment of an individual's physical, mental and sensory functionality does not equate to an assessment of that individual's capability for work or for work-related activity. Some factors that relate to an individual's impairment will have an impact on their capability for work, and obviously this must not be neglected. However, the medical factors related to their impairment are not the sum.
	The amendments are very much supported by RADAR. They would move the Bill closer to the now widely accepted social model of disability and widen its scope to reflect future advances in our understanding of what "capability for work" really means. They would allow future assessments to take account of the vast array of factors that may limit a disabled individual's capability for work. Those factors could include education, training and skills, the availability of funding for reasonable adjustments, access to the workplace, discrimination, the effect of living in an area of high unemployment and the ability to access assistive technologies and their associated training and maintenance. Similar amendments were rejected in the other place solely for technical reasons. Those reasons have now been addressed, and I can see no reason why there should not be cross-party support for the amendments as there was in the other place.
	It is critical that we agree the text of the Bill to ensure flexibility in the regulations to follow. With the current terminology, regulations will always maintain a focus on impairment rather than incorporate barriers faced by a disabled individual that are beyond their control. It could be argued that the work-focused health-related assessment should not incorporate an awareness of these wider societal barriers, and that that should be done by the personal adviser in the work-related activity stages. I would argue that the personal adviser should be involved at this first stage, which represents the beginning of an individual moving towards the labour market. Indeed, as the noble Baroness, Lady Morgan, informed us in Grand Committee, the work-focused health-related assessment will advise the personal adviser looking after the customer on the kind of health-related interventions that would benefit the customer, such as a condition-management programme.
	The narrow impairment focus wrongly emphasises the start of work-related activity. It could even alienate disabled people from making the most ofthe process. In the other place, it was noted that the work-focused health-related assessment and the medical examination process will not only look at medical issues but will have a specific and detailed approach and will examine more than just the medical barriers faced by people with disabilities who want to re-enter the labour market. This will be enabled by removing the terminology "health-related" and by not limiting any part of the assessment to healthcare professionals. The regulation must move us beyond narrow understandings of disability. We must not categorise individuals only by their impairment or medical conditions. I beg to move.

Baroness Thomas of Winchester: My Lords, we agree entirely with the noble Baroness, Lady Greengross, in her attempt to move towards the social model of disability. I shall speak to AmendmentNo. 33 in particular but I will not repeat all that the noble Baroness said. We seek flexibility in the regulations so that the kind of barriers she mentioned will be taken into account as being beyond the control of the claimant. They are just as likely to affect a person's capability for work as the kind of health-related interventions that the Minister spoke about in Grand Committee. As the noble Baroness also said, the narrow impairment focus emphasises wrongly the start of work-related activity and may alienate disabled people from making the most of the process. No one wants to be categorised as just "disabled", particularly if their confidence for work needs to be bolstered, otherwise this is how they will think of themselves. This new Bill gives us the chance to change the climate.

Lord McKenzie of Luton: My Lords, the noble Baroness's amendments all concern the social model of disability. These amendments and AmendmentNo. 33, proposed by the noble Baroness, Lady Thomas of Winchester, seek to ensure that the revised personal capability assessment focuses more widely than on health conditions and disabilities, the impact that these conditions have on customers' functional capability and health interventions that might help to raise that capability.
	Eligibility for employment and support allowance will depend on customers being determined as having limited capability for work. Equally, eligibility for the support component of the allowance will depend on customers being determined as having limited capability for work-related activity. Both limited capability for work and limited capability for work-related activity will be based on the impact of health conditions or disabilities on customers' functional capability. That is a fundamental concept; the allowance has been created for people currently unable to work because of a health condition or disability. Although customers could be disadvantaged by a range of other factors, such as a lack of skills, the local labour market or the attitudes of employers—points touched upon by the noble Lord, Lord Skelmersdale—these are not reasons for entitlement to the benefit.
	It is therefore appropriate that the regulations we use to determine limited capability for work are defined in the Bill by reference to a specific disease or bodily or mental disablement. That is the framework that we have at the moment, and we think that it remains appropriate for the revised PCA. Focusing on functional capability also helps to ensure that the assessments are applied consistently across the country. It is a key principle of the benefits system that eligibility should be defined nationally and consistently and should not be affected by local factors. Taking into account wider social factors would effectively result in different eligibility criteria applying in different areas. This could result in customers receiving different benefit entitlement decisions depending on where they live; that is clearly unacceptable. However, we will not be ignoring social factors. I will say more on this in a moment.
	The noble Baroness has proposed that we replace the term "medical examination" with "eligibility test". Again, we have used this wording for a very specific reason. The revised personal capability assessment will gather and evaluate information from a number of sources to assess whether an individual has limited capability for work or limited capability for work-related activity. As at present, we will request information from healthcare professionals and other relevant people, and customers who are not identified at this early stage as having limited capability for work-related activity will be asked to complete a self-assessment form to help us to assess their condition.
	For most customers, a part of this evidence-gathering process will be a face-to-face medical examination with a healthcare professional. The phrase "medical examination" in Clauses 8 and 9 refers to this very specific element of the PCA process. The decisions on whether a customer is eligible for either employment and support allowance or access to the support group are not taken during this medical examination, nor are these decisions taken by the healthcare professional carrying out the examination. The decisions are taken subsequently by a departmental decision-maker, who considers all the available evidence, including that gained from the medical examination. Replacing the phrase "medical examination" with "eligibility test" would not make it clear that these are references to very specific parts of the PCA process. Meanwhile, calling these examinations "eligibility tests" would not make it clear to our customers that a face-to-face examination would be involved.
	On the amendments concerning the work-focused health-related assessment, as part of our reforms we are adding a new stage to the personal capability assessment. This new stage, the work-focused health-related assessment, will be a positive experience that gives customers the opportunity to explore with a trained healthcare professional his or her perspective on their disabling condition. It will aim to identify as early as possible in a claim the health-related barriers that lie between customers and their engagement with work, as well as the health-related interventions that will help to improve their capability. There is good evidence about the beneficial effects on health of early intervention.
	Once more, we have very specifically used the term "health-related" in the title of this assessment, as we want the focus of the assessment to be on the health-related issues I have already mentioned. We use health in its broadest sense, indicating that the focus is on matters relating to an individual's body or mind and the impact of those on that individual's capability for work; as such, we include impact on the body or mind caused by health conditions and disabilities.
	We are using healthcare professionals to carry out this assessment because they have specific skills that we would not expect a personal adviser to have. For example, the assessment will identify whether any health-related interventions, such as cognitive behavioural therapy or physiotherapy, would help customers to improve their capability. It would be unrealistic to expect personal advisers or others to be able to identify these interventions as suitable for customers.
	Although we want the assessment to focus on health-related issues, I assure noble Lords that this does not mean that other barriers to work will not be taken into account. For example, the healthcare professional carrying out the assessment will be able to identify, in general terms, occupational factors that are creating a barrier to return to work, such as advising whether a customer has mobility problems making it difficult to access a workplace. But at this early stage, without a specific job in mind for the customer—or, where the customer does have a specific job, without an anticipated date for a return to work—it would not be appropriate to carry out a detailed workplace assessment. That would come at a later stage, when the customer is ready to move into work and it would be in the context of a specific job. The customer's personal adviser would then arrange the necessary workplace assessment.
	Meanwhile, the work-focused health-related assessment will allow customers to explore their own beliefs and perceptions about their disabling condition. We believe that this in itself will be beneficial to the customer, because we know that beliefs and perceptions can influence capability. People with a positive, coping attitude are more likely to be able to influence their level of capability than those who have perhaps lost confidence in their ability to cope.
	We will ask customers about the barriers that they perceive between themselves and the labour market. Although some of these barriers will be medical, it is likely that others will be societal. Again, we do not suggest that these non-medical barriers will be ignored. Information from the work-focused health-related assessment will be given to the personal adviser for use during the work-focused interviews, which will focus on wider issues such as societal factors. Although personal advisers are unlikely to have the skills needed to identify health-related interventions, they will be able to provide help to address wider issues such as transport problems, skills needs or low confidence.
	Much of the discussion in Committee was on the role of employers and the need for the Government to engage with them and help to ensure that they meet their obligations under the Disability Discrimination Act 1995 to support people with health problems and disabilities to stay in or return to work. I can assure noble Lords that we are taking this seriously, and a concerted effort is being made throughout Government with a particular focus on people with mental health problems, who can suffer a greater stigma than most. Although I would not deny that it is a big task, we are committed to it and are working together to tackle the problem.
	I know that noble Lords particularly want to raise awareness of the access to work scheme among employers, and I thank them for their support for the scheme. I assure the House that we actively promote the availability of access to work and all our disability employment services. Information is freely available on our website, at jobcentres and from our voluntary sector partners.
	I have explained at some length to the noble Baroness our intentions for the revised assessment and why we have used the wording we have. I also hope that I have reassured her that, although it would not be appropriate to base benefit entitlement on social factors or to deal with them directly in the work-focused health-related assessment, societal factors will be addressed. I hope, therefore, that the noble Baroness will be able to withdraw the amendment.

Lord Oakeshott of Seagrove Bay: My Lords, having run the first lap of this amendment in Committee, I am happy to pass the baton to the noble Lord, Lord Skelmersdale, to move it here. We support him in that; perhaps he will return the compliment on Third Reading with another amendment. We shall see.
	As we said in Grand Committee, there was considerable cross-party support in another place for amendments along these lines. I made it clear in Committee and do so again today that we do not regard as satisfactory the assurances from the Minister about what is effectively an internal review. It seems a classic example of a controlled review of which Sir Humphrey in "Yes Minister" and "Yes, Prime Minister" would have been proud.
	The amendment is very reasonable—indeed, it is modest, as it gives the Government the opportunity to chose where the independent review comes from. I cannot see how the Government can possibly object, if they really support transparency and a proper process of post-legislative scrutiny by Parliament of what are, after all, major changes in legislation, which could affect many of the most vulnerable in our society. We are happy to support the amendment.

Lord McKenzie of Luton: My Lords, I recognise the concern underlying the amendment that the revised PCA descriptors and scores should be subject to independent evaluation following the implementation of the employment and support allowance.
	I repeat the undertaking given by the Minister for Employment and Welfare Reform in another place that there will be independent monitoring of the revised PCA descriptors and scores assessing limited capability for work. Moreover, I can today commit to ensuring that this covers the first five years of operation, rather than the two years to which we have already committed. I also confirm that reports of the independent monitoring will be placed in the Libraries and that as usual they will be subject to parliamentary scrutiny by means of parliamentary questions, Select Committees and so on.
	The Government are, of course, committed to evidence-based policy making and recognise the value of seeking information that will help to establish the effectiveness of policy initiatives and their implementation. As I said in Committee, a large amount of research and review is undertaken over a whole range of policy areas and those reports are routinely published. A working paper on performance in Pathways areas was published in January last year and, as of December 2006, we have produced Pathways statistics on a quarterly basis. Furthermore, we routinely publish externally commissioned research reports as soon as they are available. Ten such reports on Pathways have been completed to date.
	We are currently evaluating the impact of Pathways on both new and existing customers in the first seven areas. The focus will be on employment, benefit exits, earnings and health and we are also evaluating the impact of Pathways as it expands to cover more districts. As we progress with our evaluation over larger areas, there will be a greater opportunity to look at sub-groups. This will include further analysis of the impact of Pathways on customers with a mental health condition.
	In addition to the quantitative assessments, we are exploring attitudes and experiences of Pathways participants and key Jobcentre Plus and provider staff. This planned evaluation will continue until 2009. We are due also to evaluate the impact of provider-led Pathways.
	We need to maintain a balance between seeking information and monitoring that helps inform policy-making and ensuring that the information gathered is appropriate and represents a responsible use of resources. We would not, for instance, wish to be obliged to provide annual reports where it has been established that the revised PCA is effectively identifying those people who have limited capability for work.
	I hope that I have reassured noble Lords that there will be an effective process of evaluation, that we will extend it over five years, and that those reports will be in the public domain and available to Parliament through the normal means. I hope that noble Lords will see that as a better route forward than an obligation to produce annual reports at fixed points in time. I ask noble Lords to withdraw the amendment on that basis.

Lord Hunt of Kings Heath: My Lords, with the leave of the House, I shall repeat a Statement made earlier today by my right honourable friend the Secretary of State for Health. The Statement is as follows:
	"In the Written Ministerial Statements of 7 and 13 March, I set out the Department of Health's plan for an immediate review of the first round of the new national recruitment and selection process for doctors in postgraduate training. As part of the Modernising Medical Careers—MMC—reforms of postgraduate medical training, new specialty training programmes will be introduced in August 2007. "To support implementation, a new national recruitment and selection process was introduced this year, facilitated by the online Medical Training Application Service—MTAS. That process sets out national recruitment and selection criteria, documentation and standards, replacing the countless local appointment processes that had previously been in place. The new arrangements were developed with the help of the medical royal colleges, trainee doctors and others. We will continue to work with them to ensure that trainee doctors are properly supported and fairly treated, and that the NHS is able to train and recruit the best doctors for the future."Doctors have been applying for their preferred specialty training programme since 22 January 2007 and interviews have already begun. A large number of posts will not be filled in the first round and we have stressed to those interviewing in round 1 that they should not consider appointing unless they are absolutely satisfied with the calibre of candidates. "It is clear that there have been concerns about the selection process, and that the process as a whole has created a high degree of insecurity among applicants and, indeed, more widely inthe profession. We therefore commissioned an immediate review to establish what had gone well and what needed to be improved to create greater confidence in the process."The review is independent, being led by Professor Neil Douglas, vice-president of the Academy of Medical Royal Colleges and president of the Royal College of Physicians of Edinburgh. Members of the review group include representatives of the royal colleges, the British Medical Association, the four United Kingdom health departments and employers. "The review group has considered a wide range of evidence and listened carefully to the concerns of the profession and NHS employers. As a result, the review group has agreed immediate action, but will also continue its work throughout March. The review group decided that round 1 should continue, with a number of changes to strengthen implementation at every level. In particular, all eligible applicants for level 3 and 4 speciality training—ST—will be guaranteed an interview for their first or second choice of training post; that includes those who have so far been offered only their third or fourth choice. All applicants at ST1 who have not been shortlisted for any interviews will have their application reviewed and may be offered an interview in round 1. If not, they willbe offered career guidance and support to enter round 2. All applicants for ST2 who have not been shortlisted for interview will be offered a face-to-face review with a trained medical adviser to determine whether they meet the shortlisting criteria. Those who meet the criteria may be offered an interview in round 1. Those who are not selected for interview will be offered career guidance and support to enter round 2."We expect over 5,000 more doctors to be interviewed in round 1 as a result of these changes. We will also publish on the MMC and MTAS websites details of competition ratios by specialty and entry level, to help applicants to consider their options for the second round, together with further advice and information for candidates. In addition, further significant changes will be made to the application form and the scoring system, to improve selection in the second round. The revised approach will be tested and agreed with the royal colleges, junior doctors, postgraduate deans and employers. I am grateful to Professor Douglas and his colleagues for their continuing work on the review group. We will publish the group's final report once it is completed".
	My Lords, that concludes the Statement.

Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Lord, Lord McColl, and the noble Baroness, Lady Barker, for their comments and questions on the Statement. I make it clear that we should appoint the best people possible to take on these training posts, as they lead to the most senior medical consultant and general practitioner positions in the country. It is very important not only that we select the right people but that the training that these doctors are then given is up to scratch. I also very much agree with the noble Baroness, Lady Barker, that, as well as ensuring that we have the best possible clinicians, we should never underestimate—I certainly would not do so—the contribution that doctors make more generally to science and to the research base in this country.
	I say to the noble Lord, Lord McColl, that the Statement certainly recognises the stress caused to many junior doctors by aspects of the current system. This has always been a competitive process, and I guess that for junior doctors there has always been a high degree of stress. I have already answered this but let me get right to the point: where failings have caused problems for junior doctors, I, as a Minister responsible, must take responsibility. I do take responsibility for it; I would never run away from it. I have already said to junior doctors that, where they have been affected by problems with the system, I am very sorry for what has happened to them.
	I say to the noble Baroness, Lady Barker, that, as soon as the problems became known to Ministers, we convened a meeting with representatives of the medical royal colleges. We agreed to a review, and those holding the review have been meeting almost constantly over the past two weeks. The Statement last Friday represented enormous hard work by all concerned, including my officials, the medical royal colleges, representatives of the BMA and NHS employers. Everyone is working as hard as they can to deal with the problems identified. I very much hope that the announcement made on Friday and the Statement by my right honourable friend in another place made it clear that we are in the process of resolving these issues. The review will carry on, and we will look very carefully at its outcome at the end of this month. Of course, we will want to learn the lessons and ensure that, where appropriate, changes are made in the current situation and into the future.
	The system has worked well in some places, such as recruitment into GP specialty training. The noble Lord, Lord McColl identified some of the inevitable challenges in the reform of the training programmes and selection to them.
	The noble Baroness, Lady Barker, is right to say that it would not have been sensible to stop the programme in its tracks. Indeed, we did not receive that advice from the review team. It has clearly worked for many people; stopping the process would just cause much greater uncertainty. The noble Baroness asked about rescheduling later rounds in the appointment process. Clearly, many more details need to be worked out. We will be guided by the review team. Of course, there are practical consequences for the health service, and we must remember the time that practising consultants have to spend in short-listing and interview committees. With all those caveats, the answer is yes: rescheduling will be considered. If it is thought to be the right thing to do, we should consider rescheduling.
	Career guidance means just that: guidance on the application process itself, with information on where the vacancies are in terms of area and specialty. It also means guidance for those who do not get through the competitive process. We should not run away from the fact that this should be a competition. We want the best doctors to be selected for the specialty training programmes, but that does not mean that those not selected should be lost either to the medical profession or to the NHS. Career guidance may be very helpful.
	The noble Lord, Lord McColl, referred to the old system. He is very experienced, and this House has great respect for him, so it is fair enough for him to say that in his own hospital things worked well. However, the general consensus is that the old system did not work well. Doctors had to submit many different applications across the country for jobs that might be for only six to 12 months. Often there could be many hundreds of applications for a single job, as short-listing processes were variable. That is why all those concerned—the Government, medical bodies and junior doctors—got together to work through a new process. The noble Baroness, Lady Barker, was right to raise that. Those bodies are now around the table finding answers to some of the issues raised. I am confident that we can ensure that the issues are dealt with. We will have a robust approach to ensuring that the right people are appointed to training posts.
	A number of comments were made about the scoring system. The processes were developed after much consideration by all the parties involved. I have taken account of noble Lords' remarks. It would be fair to say that the system has worked better with candidates who have just come out of the initial training, 84 per cent of whom have been offered interviews. The issue of the points system probably applies more to the more senior applicants. None the less, it is important to learn the lessons. I will listen very carefully to what the review team has to say about that. I have responsibility for research and development and for the pharmaceutical industry, and, as I am sure noble Lords will recognise, I want the best possible research and clinical academic doctors in this country. I want to ensure that the system that we develop gets the best individuals.
	The scoring and competency-based approach arose out of discussions and the Chief Medical Officer's 2002 report which found that, in addition to academic and technical skills, it is necessary to recognise, for example, doctors' communication skills with patients. We have had many discussions in this House about the need to enhance communication skills. However, I recognise that the scoring system as a whole is subject to comment, and we will listen very carefully to what the review group says.

Lord Hunt of Kings Heath: Ihope not, my Lords, because in the health service we are seeing many more doctors being trained and employed—30,000 more than in 1997, I think—and a huge commitment to improving the training of our doctors. That is part of the reform of the National Health Service that noble Lords have wanted and which is being put into action. The programme of training running alongside Modernising Medical Careers is intended to be much more cohesive and appropriate than the rather patchy approach that has existed for many years. However, I accept the comments of the noble Lord, Lord McColl, about his own experience.
	It is important that those making the critical decisions of appointing doctors to training posts have relevant information. That is why I said that evidence of excellence in the form of portfolio or CVs may be presented as part of the selection process; however, I believe that there has been some inconsistency between the deaneries responsible for administering the system in different parts of the country. Part of the review process will be to ensure that good practice is made known to all deaneries. I certainly accept the point made by the noble Baroness: we must appoint the right people.

Lord Rea: My Lords, it is perfectly clear that a number of candidates of very high calibre have been missed and not offered interviews. Perhaps this is a question for Professor Douglas' review group, but does this not have a knock-on effect in that those who have already received interviews may be some of those who are perhaps not of such high calibre? There is a limited number of posts and some of them the people who are perhaps not the crème de la crème may already have been recommended for them—or if not appointed. Is this not going to somewhat queer the pitch even if all those doctors who have been refused interviews eventually get one?

Lord Hunt of Kings Heath: My Lords, I can tell my noble friend that my officials have taken careful advice on the appropriateness of the procedures that are now going to be adopted. No appointments have been made in round one. I can also tell him that the initial feedback from those doctors who have already undertaken interviews is that a very high standard of candidate has been short-listed. But the importance of the Statement announced last Friday is that it enables us to strengthen the process in round one. It means that all applicants at ST1—the first level of the specialty training—who have not been short-listed for any interviews will have their application reviewed and may be offered an interview in round one. That is the most appropriate way to try to deal with the issues immediately, but as I have said to my noble friend, we have sought advice and we are confident that this is the correct way to proceed.

Lord Brooke of Alverthorpe: My Lords, I would like to pick up on the point made by the noble Baroness, Lady Barker. When everyone embarked on this journey we were in general agreement that there was a case for change; that life was not perfect under the old regime. First, I would like to know when these discussions first commenced. Secondly, could the Minister indicate at which point, in his opinion, things started to go wrong? Thirdly, I would like to address a question to some of my colleagues here. How do we know that these people who have not been selected are of high calibre? Who is making the judgment about this?
	I was in one of our famous hospitals on Friday afternoon, being tended to by a young junior doctor who told me that she was generally in favour of the changes being proposed. She was of Asian extraction. She said she believed that under the system she would have a much better chance of being able to compete for the better posts that were to be filled. She was generally in favour, but she believed that there would be strong resistance—as there always is, in her opinion—to any change, particularly from consultants and from people of the old school, as she described it. She says there is still an old-boys system operating which she found quite unacceptable—I raised this with the noble Lord, Lord McColl, at lunchtime. There will be a whole range of different views on this, but when does the Minister believe that the situation will be resolved to, as is hoped, everyone's satisfaction? Those of us who do not have a vested interest other than simply being patients in the NHS want to ensure that, as the Government proceed with their programme of modernisation, there is a direct link between delivering the agreements reached by the stakeholders and the way in which those stakeholders are subsequently rewarded with the taxpayers' money, to which we all subscribe.

Lord Hunt of Kings Heath: My Lords, I understand that there have been intensive discussions about the new system among all the stakeholders I have mentioned over the past four years. My noble friend then referred to the old system. Of course, one of the problems that has always been perceived within it has been the question of whether there was an old-boy network. There has been some evidence of that. But there were also concerns that junior doctors went from job to job without properly focused training. As I have said already, junior doctors often applied to many different institutions. Often hundreds of applications were received for one post. The whole system was completely unsatisfactory. That is why the stakeholders got round the table to devise a new system. I have no doubt whatever that coming out of this will be a fairer, better approach to the selection and training of doctors to go on these important, specialty training programmes.
	Equally, it has been clear that there have been some practical teething problems with some of the deaneries and the way the process has been approached. The purpose of the review team is to learn those lessons and put things right that need to be put right. and then to proceed with the general principles of a fair process designed to ensure that the best possible doctors are selected for specialty training programmes to the benefit of the National Health Service and the people of this country.

Lord Addington: My Lords, Amendments Nos. 22, 38 and 42 have the same basic principle. We know from the draft regulations that if a person fails to get to the interview, they have five days in which to lodge the reason why they had good cause to fail. Virtually everywhere else in the system, a person has a month to appeal and show good cause. I have here examples of why people might fail to attend and why this might not be appropriate, but one example sums this up: what happens if a person is knocked over on the way and is unconscious for six days? Why can we not have something to take care of that? A more frequent example might be mental health problems et cetera where a person has a mini-breakdown or a bad episode which takes them out of commission for that period of time, and they are unable to get in contact themselves and people cannot get in touch with them. They have lost track.
	According to my information, in the rest of the system a person has a month in which to react and register, and my amendment would bring this in line. The five-day period is far too short and arbitrary. It does not allow for variations in anyone's life, let alone the lives of those who are slightly more chaotic than the rest of us. I hope that the Minister will be able to assure us that this five-day period in the draft regulations will not be rigidly applied. If it is, people are bound to be left very short of money, possibly affecting their family and dependents. I beg to move.

Lord McKenzie of Luton: My Lords, the work-focused health-related assessment is a key component of providing support to return to work. It is the new, forward-looking and positively focused part of the transformed personal capability assessment. We believe the work-focused health-related assessment has a vital part to play in customers moving away from a dependency on benefits and into work, and we want all those entitled to the employment and support allowance to take part. Similarly, the work-focused interview is crucial to effective engagement with customers. It is the gateway to the advice, rehabilitation, financial assistance and other provisions available in Pathways to Work areas. Work-related activity will provide a vehicle for customers to take practical steps and move closer to the labour market.
	It is central to our welfare reforms that customers engage with the support that is available. We believe that when it is reasonable for someone to participate, there should be a requirement for them to do so. Ultimately, a failure or refusal to take part for no good reason can lead to sanctions. However, our aim is that the rules should be applied fairly and sensitively. We use the concept of good cause because we know there will be times when customers cannot reasonably be expected to comply with a requirement. In these circumstances, a sanction will not be imposed. We have no intention of imposing sanctions when a reasonable explanation is offered for non-participation.
	As I said in Committee, the draft regulations for Clause 10 include matters that are to be taken into account in determining whether a customer has shown good cause for not taking part in an assessment. These include the state of the customer's health and the nature of his disability at the time of the assessment. The draft work-focused interview regulations set out a non-exhaustive list of matters that may be taken into account in determining whether a customer has shown good cause for not taking part in an interview. These are intended to cover a wide range of possible circumstances and will help ensure fair treatment for all, including the most vulnerable. This will include customers whose physical or mental condition will sometimes mean that it would be impossible to expect them to take part in an interview at a given time. The safeguards listed in the supporting material provided to the House include visiting every customer, with their representative if appropriate, with a stated mental health condition or learning disability if a sanction is to be imposed.
	Within the context of the safeguards that I have outlined, it is not unreasonable to expect that in most cases, customers who are unable to participate will be able to provide an explanation. Again, in most circumstances, it is not unreasonable to expect that explanation within a few days. The draft work-focused interview regulations and the draft work-focused health-related assessment regulations refer to five working days. However, the draft work-focused interview regulations provide that if a sanction is imposed for a failure to show good cause, this decision can be revised if within a month the customer provides relevant information showing good cause that could not reasonably have been brought to our attention within five days. We are still considering whether a similar provision is needed in respect of work-focused health-related assessments.
	Without the provisions in the Bill as it stands, my concern is that fewer people on the employment and support allowance will engage with the help and support provided to assist them return to work. The amendment would give customers unlimited time in which to show good cause and would introduce an unacceptable level of uncertainty into the conditionality procedures. This would seriously undermine the conditionality and sanctions regime. I do not believe that noble Lords intend that, but it could be a consequence of their amendments. I hope that I have been able to reassure noble Lords that the protections around good cause are a reasonable approach and a fair way to proceed.

Lord Addington: My Lords, I think that that was close to saying there is some flexibility, but we will have to have a look at that. Perhaps I should say that I hope that that is the interpretation to be drawn from what the noble Lord has said. Therefore, providing those who are more expert in this area of law than I make that interpretation, I beg leave to withdraw the amendment.

Lord Oakeshott of Seagrove Bay: My Lords, I support the amendment in the names of the noble Baroness, Lady Meacher, my noble friend and myself. The noble Baroness made the points very clearly. We support them and look forward to hearing the Minister's answer. My Amendment No. 89 is in this group and deals with the definition of healthcare professionals.
	I do not propose to repeat the extensive discussion that we had in Grand Committee, but I thank the Minister for the letter he wrote to me on 6 March attempting—only attempting, I am afraid—to clarify the Government's position. It contains a lot of talk about appropriate skills and the department's chief medical adviser, but it does not clarify what I can only call the grey area at the end of what the Government are talking about. We all agree that a doctor, nurse, occupational therapist or physiotherapist registered with the Health Professions Council is clearly a healthcare professional. But can the Minister give us a proper answer about what other categories can or will be included and on what basis? Our definition in Amendment No. 89 describes a,
	"member of such other profession, regulated by a recognised professional or medical body, as may be prescribed in regulations".
	I hope that he accepts our amendment.

Baroness Morgan of Drefelin: My Lords, I hope that I can reassure the noble Baroness further. When I talk about Atos Origin doctors I mean medically qualified doctors. I will expand on that further if I may.
	Appointment by the Secretary of State will ensure that any healthcare professional carrying out a work-focused health-related assessment is suitably qualified to carry out all aspects of that assessment and has been trained to the standard that the Secretary of State considers appropriate. If the healthcare professional does not have the appropriate qualifications or has not been trained to the appropriate level, he or she will not be approved to carry out the assessments.
	The healthcare professionals will receive training to equip them with the skills needed to identify the health-related barriers to work and possible health interventions which will be required when conducting work-focused health-related assessments.
	I turn now to Amendment No. 89. Clause 61 relates to the use of healthcare professionals in social security benefit assessments and covers a range of benefits. However, the definition of a healthcare professional is also referred to in Clause 10(8), which relates specifically to the new benefit, ESA. It is important that we maintain a consistent position throughout the legislation. I understand the concerns which have been expressed about the need to ensure that only appropriate healthcare professionals are used to carry out assessments. We all agree that only properly trained healthcare professionals with appropriate skills should be used to carry out medical examinations. As I have said, we have the added security and safeguard that all healthcare professionals must be approved by the Secretary of State before they can undertake medical examinations.
	We have no plans to use healthcare professionals who are not members of a regulated profession. Bearing that and the Government's commitment towards regulating more healthcare professions in mind, we agree with the principle behind the amendment proposed by noble Lords and believe it would be appropriate to look again at the way we have approached the structure of the legislation here. I believe that we are able to meet the concerns that have been raised, while retaining flexibility to use other professionals from regulated professions, should it prove appropriate to do so to address any skills gap which may be identified in the future.
	With the House's agreement, we would like to take away Clauses 61 and 10 and consider further an alternative wording which would address noble Lords' concerns. We discussed this at some length in Grand Committee and my noble friend has written to the noble Lord, Lord Oakeshott. I believe that we will be able to return at Third Reading with a practical solution which will meet noble Lords' concerns.
	I shall deal with one point about the training that all healthcare professionals get in assessing mental health conditions. We will ensure that that remains up to date and effective. For ESA, there will also be assessments of people with learning difficulties, many of whom are currently exempt from undergoing a PCA. We shall ensure that people get the appropriate training.
	As for appeals, most of them take place because the relevant information is unavailable to the decision-maker at the time of the decision. That is something that we discussed in Committee.
	I hope that, given the suggestion that I have made, the noble Baroness will withdraw the amendment.

Lord Skelmersdale: My Lords, this amendment would implement a rather more substantial modification to the Bill than would my previous amendments. The key part of getting a customer to consider taking up work or work-related activity is the interaction between the personal adviser and the claimant. The amendment would introduce the personal adviser—and, thus, the positive support for the claimant that he or she should provide—at the earliest possible stage of the process.
	As I understand it, the work-focused health-related assessment currently appears rather clinical. After undergoing a tough eligibility test a claimant is required to go off to another test to be further questioned, this time with little or no explanation about what is to be achieved and what happens next. The personal adviser could and indeed should provide that.
	I understand why further medical assessment will be necessary. The first eligibility assessments are tightly defined by the descriptors whereas I imagine the assessment here would be much more wide-ranging and might even include some medical assessment of the customer's condition. The Minister will remember that I asked about that at the meeting that he so helpfully provided in the department the other day and was told that it would not involve complete undressing but that there might be a need for the customer to remove his jacket, for example, so that tests could be carried out on the flexibility of his shoulders or elbows. I am sure that the Minister will remember that. It is hardly invasive or embarrassing, so there does not appear to be a good reason why the personal adviser should not be present. It would make the assessment even more useful if it encompassed not only the medical possibilities and treatments that might be available but the non-medical training and activities that the claimant could undertake.
	The Minister raised the issue of confidentiality, which must place some limit on how involved the personal adviser can be, but I still feel that there would be a role for the adviser to play in fulfilling the work-focused element of the assessment more effectively and moving the claimant through the system quicker. That is to everybody's advantage, not least that of the claimant. I beg to move.

Baroness Hollis of Heigham: My Lords, is not the Minister effectively saying not only that many of those personal advisers would do nothing else but sit in on other people's interviews, thus not allowing them to use the skills in which they receive specialist training—supporting moves back into the labour market, testing work and so on—but also that there could be a real problem in terms of tribunal review if a personal adviser who becomes a decision-maker has the decision in which they took part reviewed. That could apply to two stages: not only the interview but subsequently the benefit allocated. That would put the tribunal procedure in a very difficult position. Will the Minister confirm both those points?

Lord McKenzie of Luton: No, my Lords, I am not. However, I will explain precisely how we intend to carry forward what I have said.
	Amendment No. 47 would have unintended consequences for a wide range of functions beyond decision-making that leads to sanctions. Contractors would not be able to revise or supersede a decision to waive work-focused interviews where it was appropriate—for example, if interviews were waived because a customer expected to start work but subsequently did not.
	Amendment No. 46 could still give scope for the contracting-out of decision-making that could lead to sanctions. This is because the functions of decisions leading to sanctions will be imposed under Clauses 10(1), 11(1) and 12(1) rather than under the clauses referred to in Amendment No. 46. As these amendments would not achieve their stated aim and would interfere more widely in Pathways and ESA operation, we cannot accept them. However, I will make a commitment to bring forward amendments at Third Reading to achieve the desired result of removing powers to contract out decision-making that will lead to sanctions.
	I therefore hope that the noble Lords will feel able to withdraw these amendments and return to this matter at Third Reading.

Lord Taylor of Holbeach: moved AmendmentNo. 48:
	Clause 19, page 16, line 43, at end insert—
	"( ) Regulations may provide that—
	(a) an assessment is to be made to identify all statutory entitlements and allowances to which a claimant is entitled, (b) a claimant is to be notified of their statutory entitlements, and (c) a claimant is to be advised on how statutory entitlements may be claimed."

Lord McKenzie of Luton: My Lords, let me see if I can give noble Lords the clarifications they wish in this area. The amendment seeks to create provisions which would allow regulations to specify that when people claim employment and support allowance an assessment is made of their other entitlements. They are then notified of any entitlements and advised how to claim them. It is only right that people should have full access to information and advice on the financial and other help available to them. The Department for Work and Pensions already provides extensive background information on the full range of benefits, statutory entitlements and how to go about claiming them. For example, where customers require quick or urgent advice they can contact their local office or call Jobcentre Plus Direct or their appropriate benefit delivery centre. Our wide range of literature is available in many locations and formats. For example, the Jobcentre Plus leaflet entitled A guide for disabled people, those with health conditions, and carers explains the support that is available to those people if they are unable to work, looking for work or not looking for work at the moment but may in the future. In addition, the customers home page of the Jobcentre Plus website signposts disabled customers to the specialist help available for disabled people; for example, Access to Work, Workstep or Remploy.
	We acknowledge that there are many challenges associated with producing customer information. We have made much progress in rationalising our leaflets and the information on our websites and increasing its accuracy and availability. We are moving in the right direction but recognise that there is more to do. As the implementation of ESA progresses we will continue working with all stakeholders to ensure that this information gets to the right people at the right time and in the right way.
	There is cross-government co-operation in this respect. The Disability and Carers Service is working with the Department of Health to improve the ways benefit advice about disability living allowance and attendance allowance can be delivered. This includes exploring the provision of benefit advice through the "information prescription" which the Department of Health will trial in England. We have also taken steps to improve the customer management system scripts. The department's officials responsible for the system are in touch with Macmillan so that there may be a real opportunity for Macmillan's aspirations for its service users to become a reality. I am sure noble Lords will agree that this is a positive move forward.
	Jobcentre Plus is fortunate in that it is staffed by dedicated and hardworking staff who already do all they can to provide information at the right time to all those who contact it for help and advice. I am, therefore, not convinced that the power to provide for a statutory duty would add anything to the requirement that we already place on Jobcentre Plus. Accordingly, I hope that I have provided the comfort that noble Lords require and that they feel able to withdraw the amendment.

Lord McKenzie of Luton: My Lords, I agree entirely that we should do all we can to ensure that our customers are made fully aware of all the benefits and opportunities that the system provides for them through support and benefit. That is very important and absolutely right. I outlined in my initial response to the amendment the sorts of things that are going on; in particular, changing the script—for those who reach us on the telephone—with prompts to encourage people towards certain benefits when the conversation suggests that that might be appropriate. We notify customers when we reach benefit decisions and when we make payments; a full range of information is provided. We recognise that there is more to be done. I suggest that this does not simply involve personal advisers; the first work-focus interview, with the personal adviser, is a key opportunity to explain to people the journey on which they are about to embark and some of the benefits and opportunities around that; that is important. However, that is not generally the first point of contact, which is made when people ring up. That system, too, needs to provide information; that is why we are looking at scripts and working with stakeholders to get those right.
	All that the amendment says—this is why it does not achieve anything—is: "Regulations may provide that". In a sense, the department already has the power to do all that is contained in the provisions that are then listed in the amendment. It is not helpful for that to be expressed in those terms.
	We do not disagree about the importance of ensuring that people are appropriately and fully informed about entitlements and about what the system can provide; I simply do not think that the amendment takes us very far. I believe that it is a probing amendment in any event and hope that the noble Lord still feels able to withdraw it. I hope that we are agreed about where we should be on this issue.

Baroness Thomas of Winchester: My Lords, the Minister is in such a generous mood that I have hopes for the amendment. We have tabled this amendment again, having reflected on the debate in Grand Committee and after receiving further evidence from our advisory groups.
	First, I should say that we are talking not about full passporting of all benefits for those on ESA but about free prescriptions. Free prescriptions are available for other benefit claimants, and it seems bizarre that they are not necessarily going to be available for all low income ESA claimants, who are, by definition, in poor health. I must reiterate what I said in Grand Committee, which is that a MORI- commissioned survey five years ago showed that as many as 750,000 people were failing to get their prescriptions dispensed because they could not afford the charge.
	It is worth taking a little time to examine what happens now. As things currently stand, those on the contributory strand of jobseeker's allowance move across, after six months, to the income support JSA, so this group can access free prescriptions that way, but there is nothing similar in this Bill for those on the contributory strand of ESA. In general, looking at all those entitled to free prescriptions, there are those aged 60 and over; those aged under 16, or under 19 and in full-time education; those receiving income support or the guarantee credit of pension credit, or income-based JSA; and some are receiving working tax credit or child tax credit.
	Another group that receives free prescriptions are pregnant women and those who have given birth in the past 12 months, regardless of their income, so there is a clear precedent for extending the exemption from prescription charges beyond those in receipt of income-based benefits. Is it not likely that ESA claimants will be just as much in need of an exemption from prescription costs—if not more so—than anyone in one of those categories? One very important question is whether or not the fact that claimants are unable to afford to pay for the prescriptions they need will be treated as having good cause in the event that they are unable to comply with the conditionality imposed on them. That question was not raised in Committee.
	What we are asking for is some adjustment to the initial application for ESA to incorporate a suitable income test, the outcome of which could be passed to the Department of Health, which administers the exemptions system. There is some precedent for such a system and information-sharing between government departments in the liaison between the HM Revenue and Customs and the Department of Health on exemptions for tax credit claimants.
	Does the Minister agree that this suggestion fits in with the Government's aspiration to improve their service to their customers, or claimants, by using technology to share information between government departments?
	In Grand Committee, the Minister spoke about the change to the system of prepayment certificates from July this year, which is very welcome for those on low incomes. However, Citizens Advice client evidence suggests that awareness of both the prepayment certificates and the low income scheme is poor. Some clients find out about the operation of these schemes only when they seek advice because they cannot afford their prescriptions or because they received a penalty for fraud as a result of claiming exemptions to which they wrongly believed they were entitled. The distinction in exemption entitlements between income-based and contributory-based benefits is often not obvious to claimants, especially as both may be paid at the same weekly rates. The amendment gives an opportunity to avoid carrying over into the new ESA regime the unfairness contained within the existing IB system by making all low-income ESA claimants exempt from prescription charges.
	Making sure that ESA claimants are able to access medication prescribed for them should be central to the Government's welfare reform agenda. The clear focus in ESA is to address people's health problems so that they can be encouraged back to work. Its introduction strengthens the case for tackling this problem to ensure that efforts to improve condition management are not undermined. I beg to move.

Baroness Morgan of Drefelin: My Lords, I thank the noble Baroness for raising this amendment again and for giving us the opportunity to discuss the matter on Report.
	The amendment seeks to probe our intentions for passported benefits within ESA. The noble Baroness also asked about the comparison between those on the contributory elements of both ESA and jobseeker's allowance. As I said previously, we understand the importance of income-related benefits to our customers, both for the income they provide in and of themselves and because they often also allow the customer to qualify for other benefits.
	As I made clear in Committee, we expect to bring existing passporting rules into the income-related strand of employment and support allowance, allowing access to the same range of benefits as offered by income support. The range of support includes free prescriptions and remission from other NHS charges, such as optician and dental costs, benefits such as free school meals, school uniform grants and cold weather payments, milk tokens and vitamins for young children and expectant mothers. In addition, customers receiving the income-related strand of ESA will be passported on to the maximum level of housing benefit and council tax benefit. As noble Lords know, that can make a huge difference to the income of families, particularly those in greatest financial need.
	Customers receiving only contributory benefit are not currently passported automatically, as we discussed, because the schemes in question are targeted support meant for those most in need, and entitlement to contributory benefits is not based on household income. However, someone on a low income who is in receipt of incapacity benefit or, in the future, contributory ESA, may still qualify for additional help through the low-income scheme. Noble Lords will understand, therefore, that there is no financial disadvantage regarding prescription charges between contributory jobseeker's allowance and employment and support allowance, as those on low income will qualify for help whether passported or otherwise.
	We accept that this scheme requires additional forms to be completed and we recognise that that is an issue, but it provides valuable access to free prescriptions and is designed so that no one on a low income need be unable to afford prescriptions.
	Additionally, from 2004, people have been entitled to full remission of NHS charges on more generous terms. Previously, people were entitled to full help through this scheme only when their income was equal to, or less than, their statutory requirements. From 2004, people became entitled to full help if their income exceeded those requirements by up to 50 per cent of the prescription charge. This means that people whose income is only marginally above income support level are now entitled to full help.
	Again as I advised noble Lords during Committee, as part of their response to the report of the Health Select Committee on NHS charges, the Government undertook to explore the possibility of accessing free prescriptions without the need to make a separate low-income scheme claim—a significant point. This will be looked at as part of the overall review of prescription charges. The noble Baroness, Lady Thomas, highlighted the complexity of prescription charge exemption. Looking at the list that she took us through and at all the different exemptions, it is clear that a significant review needs to be undertaken, and the Department of Health is undertaking such a review. However, when doing this, we need to be mindful of getting the balance right. The challenge is to find a way of identifying those with low incomes and ensuring that our information is up to date as people's circumstances change without being overly bureaucratic or intrusive. The Government will report the outcome of this review by this summer.
	In addition, as I said in Committee, the Government have agreed that, to make it easier for customers to meet the cost of annual prescription prepayment certificates, they will be available through monthly direct debits from July 2007. At the same time, four-month prepayment certificates will be replaced by lower-cost three-month prepayment certificates, something for which I know stakeholder organisations have been campaigning for many years.
	I just wanted to pick up on the point about sanctions. If a customer's state of health or his physical or mental condition prevented him fulfilling a particular requirement and if this was a result of not having a prescription medication, that could count as a good reason for not attending. There is no reason why someone on low income should be unable to obtain a prescription; that is what the low-income scheme is for.
	In the light of the reassurances that I have given, I hope that the noble Baroness will consider withdrawing her amendment. I appreciate that she is highlighting a very important and complex issue for people with significant health needs. I hope that, through the review of prescription charges, some of these issues can be further aired.

Baroness Thomas of Winchester: My Lords, the other matter, which takes us back to an earlier amendment, is that job centres must tell people about the low-income scheme, particularly those on the contributory strand, who may be only marginally better off than those on the income-based strand. They should be told that this is available so that everybody knows about the low-income scheme.
	Again, I am glad to welcome the review and I hope that there will be a report to Parliament so that we can see its result. I beg leave to withdraw the amendment.

Baroness Meacher: My Lords, the purpose of the amendment is to clarify the procedures which would remove one of the most powerful disincentives for ESA claimants to strive to find a job. At present, the linking rules look helpful on paper but sadly do not work in practice.
	Under the current rules, if an IB claimant accepts a job but within a two-year period loses the job, if they wish to reclaim IB they must contact a call centre, which will forward a relatively short application form to the claimant. The form must be completed correctly—I believe, not surprisingly, that a lot of them are certainly not completed correctly—and returned to the job centre. The claimant will then be invited for interview and asked to bring with them a number of documents to prove identity and any change of circumstances. In reality, a claimant with a mental health problem who has just lost a job will not be in any kind of state of mind to organise themselves to complete the reclaim process effectively. Lots of delays and confusion can be expected before benefit is restored, if at all. The target time for completing the process for reclaiming IB, but not, I emphasise, housing benefit, is 18 working days from receipt of the completed application form. In reality, taking into account delays and errors, which may well be down to the claimant, two to three months can pass under the linking rules before benefits are restored.
	I mention housing benefit because until now the linking rules have not applied to that. I know from our front-line staff in East London and City Mental Health Trust that, for people with mental health problems, this often causes chaos and risk of eviction, which will be avoided only by intensive and highly time-consuming work on behalf of mental health staff.
	The amendment provides a solution to these problems. It would remove the fear experienced by any mentally ill person contemplating taking a job and relinquishing the safety net of benefit. Any claimant knows that they face stigma and uncertainty when taking a job, and if they then fail and lose the job, they will have intolerable uncertainty and lack of money before benefit is restored. The amendment provides for the situation where a person with a mental health problem takes a job and subsequently loses it. A letter from a responsible clinician certifying that the person was once again out of work and in need of benefits would trigger renewal of benefit payments immediately. Paragraph 4(1) of Schedule 2 states that a second period out of work within,
	"a prescribed length of time is to be treated for the purposes of this Part as a continuation of the earlier period".
	It is precisely that spirit that, I believe, supports the amendment. It makes clear that the usual safeguards against abuse under the linking rules should apply. However, these safeguards would be applied during an initial holding period while the new ESA is being paid. The restoration of benefit would thus not be delayed while these procedures were followed. Quite the opposite: benefit would be restored for a holding period of perhaps three months immediately. As benefit was restored a form would be sent to the claimant to satisfy the date of leaving the job, efforts would be made to ensure that the form was completed and returned, an interview would be organised, and so forth. In other words, everything could continue just as it does now, but you would not have the intolerable delay before any money is paid while the processes are pursued—and the poor old claimant makes all sorts of mistakes involving a lot of delay.
	This reform could be introduced to apply only to a period of perhaps six months from the date of taking a job. The linking rules apply to a two-year period. From discussion with the Minister and officials, I understand that over a two-year period you could expect some considerable change of circumstances, which could make this whole process rather complicated. This would ensure that the individual circumstances are unlikely to have changed dramatically. Changes of circumstances between the original period of claim and the subsequent holding period could perhaps be ignored on the grounds that the period out of work was treated, as it says in the schedule,
	"as a continuation of the earlier period".
	That would be difficult to justify if the two periods were very far apart. I know that the Minister fully appreciates the problems that the amendment is designed to deal with, and I hope very much that he will feel able to support the amendment. I beg to move.

Lord McKenzie of Luton: My Lords, we believe that people with mental health problems and those with fluctuating conditions who move between benefits and work need to have their benefit position properly protected. I fully appreciate the concerns that noble Lords have raised about this important issue.
	The linking rules protect people receiving benefits because of incapacity for work—or, in the future, limited capability for work—who leave benefits and then find they need to return to it. The linking rules are designed to enable people to return to the same position on benefit as when they left it. The rules apply to incapacity benefit, income support, housing benefit and council-tax benefit, and they will also apply to ESA.
	Last October, in response to concerns about the complexity and the scope of the linking rules in incapacity benefits, we simplified and improved the rules in four ways. First, the long-term linking rule period for people who have been incapable of work for more than 196 days and who leave benefitfor work or training was doubled from 52 weeks to 104 weeks. Secondly, work or training that starts within a month of the benefit ending counts for the purpose of this rule, instead of that which starts within one week, as was previously the case. Thirdly, we have removed the requirement for a customer to provide formal notice at the point they leave benefit to start work or training. Prior to last October it was possible that some people would not qualify for protection because of this notice requirement. Instead the information about work or training will be gathered when a new claim is made. Fourthly, customers returning to benefit now requalify for the long linking rule immediately. They no longer have to spend a further 28 weeks on benefit before using the long linking rule again.
	We believe that those significant improvements provide considerable reassurance to people making the transition from benefit to work or training, which is so important if we are to fulfil our aspirations for reducing the number of economically inactive people. I fully appreciate the noble Baroness's concerns about people with mental health problems having difficulty in coping with a return to benefit when a job does not work out, but a fully automatic system would not be appropriate. It is important to check that the customer's circumstances have not changed substantially so that we can make sure that they receive the correct amount of benefit. If we did not undertake these checks, it is possible that vulnerable people may be asked to live on levels of benefits below their proper entitlement.
	Under the existing system, when a person returns to benefit and the linking rules apply, no referralis made for a personal capability assessment until13 weeks have elapsed. Benefit is awarded on the basis of a medical certificate from the GP, provided that all the usual conditions of entitlement are met. At that stage, further specialised information about a person's mental health, such as from a psychiatrist, would not be needed for a benefit award, though further information may be sought after 13 weeks as part of the normal referral process for a personal capability assessment. We intend to carry forward this part of the existing system to ESA, thereby making partof the amendment unnecessary. In addition, it is important to realise that the linking rules will return a customer to the same place within the benefit; for example, someone returning to benefit via the linking rules would not need to serve the assessment phase again, provided he had completed it when previously on benefit.
	Last October, we also made further improvements to the claims process for benefits and extended the rapid reclaim process that applies to income support and jobseeker's allowance to incapacity benefit. People claiming incapacity benefit are able to make their new claim on a shortened rapid reclaim form if they have claimed incapacity benefit within the past 12 weeks and there has not been any relevant change of circumstances since their last claim. We intend that this new process will be carried forward to employment and support allowance. In addition, we also have arrangements in place for representatives to make claims on behalf of customers where a person is unable to look after his own affairs. This is particularly important for customers with mental health problems. Although improvements have been made, we cannot remove completely the requirement for people to provide a statement of their circumstances so that entitlement can be established accurately. This is important to us in our desire to reduce error and important to customers to ensure that they are not missing out on any potential entitlement. Finally, we are also improving the linking rule further by extending the existing short linking rule to 12 weeks for ESA customers.
	We believe the current arrangements strike a sensible balance, but we are conscious of the concerns expressed and the practical points raised, particularly by the noble Baroness, Lady Meacher. We continue to look at other ways of improving the claims process. I hope the noble Baroness feels able to withdraw her amendment.

Lord Davies of Oldham: My Lords, I beg to move that this Bill be now read a second time.
	The Bill rewrites the core provisions of our current income tax legislation. It has been produced by Her Majesty's Revenue and Customs Tax Law Rewrite Project, which is working to rewrite our direct tax legislation so that it is clearer and easier to use. I should explain to the House that the Bill has been certified as a money Bill. It was introduced into Parliament in another place at the beginning of December. Under the special procedures applying to these tax law rewrite Bills, the substantive debate on Second Reading was held in Committee. The Bill then passed to a Joint Committee where it was considered on 24 January. The Joint Committee, chaired by Kenneth Clarke MP, includes among its members the noble Lords, Lord Newton of Braintree, Lord Blackwell and Lord Goodhart, the noble and learned Lord, Lord Millett, and my noble friends Lady Cohen and Lord Haskel. I am grateful to them for their efforts in scrutinising the Bill. The Bill then passed back to the House of Commons to be debated at Third Reading and has now come to this House for its remaining stages, which the rules say can be taken in one day.
	This is the third rewrite Bill to venture into the realm of income tax. Once enacted, it will complete the project's work on income tax. In particular, the Bill deals with the basic provisions about the charge to income tax, including income tax rates, various reliefs and the calculation of tax liability.
	Before I say any more about the specifics of the Bill, it is perhaps worth putting it in context by explaining a little about the work of the Tax Law Rewrite Project. It was set up in 1996 under Kenneth Clarke, then the Chancellor of the Exchequer. It is a project to rewrite the UK direct tax code, the provisions of which have been enacted over the past 200 years. The principal aim of the project is that the rewritten legislation should be accepted by all the main users as clearer and easier to use. To this end, it proceeds through careful consultation and consensus, in particular through its consultative committee, whose members are drawn from the main representative bodies in the tax world and business. Its work is overseen by its steering committee, chaired by the noble Lord, Lord Newton of Braintree—I am pleased to see him in his place—whose members include parliamentarians from both Houses.
	This is the third income tax Bill, but the fourth Bill, to emerge from the project. The first Bill became the Capital Allowances Act 2001, the second became the Income Tax (Earnings and Pensions) Act 2003 and the third became the Income Tax (Trading and Other Income) Act 2005. Those Acts have all been warmly welcomed by tax professionals and other users.
	It is beyond the remit of the project to make any changes in the main tax policies, but it can encompass minor changes where they will improve the legislation. Examples of such changes include new provisions to clarify points in the existing legislation, repeal obsolete material and correct minor anomalies. While making the legislation more accessible, the project takes great care to preserve the effect of the present legislation, apart from those minor agreed changes. An important part of the role of the Joint Committee is to scrutinise such changes as are in the Bill to ensure that they are indeed minor.
	During the project's work on the Bill,31 consultation papers and a draft Bill were published for formal public consultation. A response document summarising the comments made on the draft Bill and setting out how the project has taken account of them was issued last September. The consultative process is not limited to formal papers, and the project uses other ways to involve users of tax legislation and keep them informed—for example, through informal discussions with interested parties and through its website. The Joint Committee noted the widespread public scrutiny of the Bill as a whole and the minor changes in particular, which are flagged up very clearly in the consultation process. It satisfied itself that all of them are within the remit of the project.
	The Joint Committee also carefully considered the amendments to incorporate new material into the Bill about the accrued income scheme before agreeing that those amendments be made. In its report, the Joint Committee noted that, while substantive new material should normally be included in the Bill prior to introduction, there were exceptional circumstances in this case and the clauses had been subject to extensive consultation. The Joint Committee also gave particular attention to Clause 1029, which will confer on the Treasury, for a limited period, a power to undo changes in the law made by the Bill in order to restore the law to what it was before the Bill came into force. This is similar to the power to make consequential amendments included in the previous rewrite Bill, in that it allows amendments to be made to correct the Bill without having to use primary legislation. This new power will, in particular, enable inadvertent changes to be corrected without the need for recourse to a Finance Bill. An undertaking has been given in another place that orders will only be introduced under this power with the agreement of the project's committees.
	On the content and approach of the legislation, the charge to income tax has historically been broken down into a number of schedules. The project's first two income tax Acts—known as the ITEPA, the Income Tax (Earnings and Pensions) Act 2003, and the ITTOIA, the Income Tax (Trading and Other Income) Act 2005—abolished these schedules for income tax purposes and replaced them with income categories.
	This Bill completes the picture. First, it tackles the core provisions of income tax. It contains the rewritten legislation for the basic provisions about the charge to income tax, income tax rates, the calculation of income tax liability and personal reliefs. The Bill also contains the rewritten legislation for various specific reliefs including loss relief, the enterprise investment scheme, venture capital trusts, community investment tax relief, relief for interest paid, gift aid and gifts of assets to charities. Additionally, the Bill contains specific rules about settlements and trustees, deduction of tax at source, manufactured payments and repos, the accrued income scheme, tax avoidance and general income tax definitions.
	The provisions about the calculation of a person's income tax liability are a particular feature of the Bill. The opportunity has been taken to provide a much fuller presentation of how the various elements to be taken into account in arriving at a person's overall income tax liability fit together. This has been well received in consultation.
	Various techniques have been used in the Bill to make legislation clearer and more accessible. First and most important is the imposition of a coherent structure, the material being presented in a logical way with linked topics grouped together. The Bill also contains plenty of navigational aids for the reader, such as introductory scene-setting chapters and signposts to other relevant provisions. Other features of the rewrite process include shorter sentences, modern language, more consistent definitions and greater use of aids to the reader, such as formulae and method statements. All this combines to make the law more accessible, easier on the eye and altogether more user-friendly.
	The project continues to enjoy the support of the users of the legislation. The comments made by the representative bodies confirm that this latest Bill from the project has, indeed, been well received. The Institute of Chartered Accountants in England and Wales commented on the draft Bill, and can be taken as representative of users when it said,
	"we commend the Tax Law Rewrite team on having produced another excellent rewrite Bill".
	The Chartered Institute of Taxation, another representative body, said,
	"once again, we found that the draft provisions in the main",
	were "clearly drafted".
	To sum up, this is an immensely worthwhile project which modernises our current direct tax legislation, making it clearer and easier to use. It would be wrong of me to conclude without paying tribute to everyone who has taken part in this work, from the time of its initiation by Kenneth Clarke in 1996. We owe a particular debt to the noble and learned Lord, Lord Howe of Aberavon, for his long service as chairman of the steering committee, and to his successor in that role, the noble Lord, Lord Newton of Braintree. It can be fairly said that this is a matter where there is no party-political controversy of any kind.
	This Bill is another major milestone in the work of the project and completes its work on the rewrite of income tax. The Bill maintains the project's excellent work and its track record of improving existing legislation as it turns its attention to its next task, that of rewriting the legislation about corporation tax. I commend the Bill to the House.
	Moved, That the Bill be now read a Second time.—(Lord Davies of Oldham).

Lord Newton of Braintree: My Lords, I certainly do not want to take any great amount of your Lordships' time, but I felt that I had to say something. As the Minister acknowledged twice, or perhaps three times, I am currently the chair of the Steering Committee for the project. If anyone is mystified and wants to say, "Why you?", or "Why me?", whichever is appropriate, they had better turn to others for an explanation. My noble and learned friend Lord Howe of Aberavon appeared to have decided that I was a good person to take it on from him. I understand that he managed to persuade the project and the Minister of that view; they ganged up on me, and I allowed my sense of inadequacy to be overwhelmed by these blandishments.
	I therefore agreed to take over as chairman of the Steering Committee—with some diffidence, given that this project had been born in the mind of my right honourable friend Kenneth Clarke, as a former Chancellor of the Exchequer, and carried forward by my noble and learned friend Lord Howe of Aberavon, who had been looking after it for the whole of its 10 previous years of life. At any rate, here I am, and pleased to be associated with—to endorse the Minister's words—a very worthwhile venture.
	I want to do little more, except to join in his tributes to various people. I have mentioned some of them, particularly my noble and learned friend Lord Howe of Aberavon, whose project this became over those 10 years. Alongside them, I want to express my thanks to the project team, some of whom might just be in earshot at the moment, and to my colleagues on the Steering Committee; not least, the noble Baroness, Lady Cohen of Pimlico, and a number of others who devote great diligence to studying complex and lengthy papers. They make an extremely important contribution to the project. My main purpose apart from that was simply to be here to support the Minister and to urge the House to let him have his Bill. It looks as if the House is in a fairly docile frame of mind, so I am optimistic that my plea will not fall on deaf ears. However, I would like to make two related points, which I hope are not out of order.
	First, this project, as the Minister indicated, has been going on a long time. It was not originally envisaged to last as long as it already has, and it has still not by any means completed its work. I say to some who have assisted with the project through consultation that I am conscious that, with the acceleration of the project, there have been mutterings about consultation overload. I want to assure them that all of us connected with the project are very aware of that, and will do everything possible to try to ensure that consultation takes place in a way that minimises rather than maximises the burdens and pressures on those whose co-operation we require.
	Secondly, because of some of the pressures on the Steering Committee and therefore the whole project, there is a tendency—not among the professional bodies, but in one or two quarters—to confuse simplifying the writing of complicated legislation with simplifying the legislation. One grumble that we pick up is, "You may have made the thing clearer, but it is still extremely complicated. Why doesn't somebody simplify it?". The Minister will understand if we say that this remark is directed at the Government and not the project, because our specific terms of reference are to simplify the writing of the legislation, however complicated, but not to simplify the legislation.
	The Minister and his colleagues ought to be aware that considerable anxiety remains outside that, despite the relative applause for the simplified drafting, somebody ought to be doing more about simplifying the legislation itself. Now, while I expect no great declaration from the Minister tonight, I hope that he might carry that little message from those of us who are at the coal-face in this matter to his colleagues in the Treasury. Meanwhile, apart from thanking everyone, exuding good will and urging the House to accept the Bill, I have nothing else to say.

Baroness Noakes: My Lords, I thank the Minister for introducing the Bill, and I state for the record that I am never knowingly described as docile. We welcome the Bill, as we have welcomed the earlier products from the tax law rewrite project. Anything that makes our tax code more comprehensible has to be welcomed. The Minister explained that the project was started by my right honourable friend Kenneth Clarke when he was Chancellor of the Exchequer in 1996, and I pay tribute to my right honourable friend not only for initiating the project but for sticking with it, because he now chairs the Joint Committee of both Houses on tax law rewrite Bills. I also pay tribute to all those who have laboured to produce and to scrutinise the Bill, and I must single out for special mention my noble friend Lord Newton of Braintree, who I am glad could be with us this evening and who chairs the steering group. I am sure the Minister will have noticed that there is something not quite right about this evening's proceedings on this rewrite Bill; that is, the absence of my noble and learned friend Lord Howe of Aberavon, who normally likes to join us on these occasions. He cannot be with us this evening, and I was grateful for the Minister's kind remarks about him. We will miss his wisdom and experience this evening.
	There has been little controversy about the Bill. Concerns were expressed at the wide-ranging nature of the Treasury's power in Clause 1029, but we accept the assurances given by the Minister in another place that the power will be used only with the involvement of the relevant committees. Concerns were also expressed at the very late addition of clauses on the accrued income provisions, but again we accept, as did the Joint Committee, that the exceptional nature of the process meant that this treatment was merited. Such little controversy about a Bill that runs to 1,035 clauses and four schedules is a tribute to the effective way in which the rewrite process is being run; but we should be under no illusions—I hope that the noble Lord, Lord Newby, will note this—about the length of our tax code. I believe it is very likely that, when the Bill becomes law, the tax code will have lengthened to the point where we might rival or possibly even overtake India for the dubious title of the country with the longest tax code. Perhaps the Minister will say whether, once the Bill is law, we will have the longest tax code. We were still 1,000 pages or so behind India before the Bill, but we might well have caught up.
	Of course, length is not the most important issue. The rewrite process has taught us that explaining our tax law in simple and direct terms often does not result in fewer words. My noble friend Lord Newton referred to that. The key issue is complexity. I do not know of any international league tables that explicitly calibrate complexity, but it is fair bet that if there were, our tax code would be up there vying for the top slot. Let me take the example of the accrued income scheme, the rewrite of which was added late to the Bill. When the scheme was first introduced, which I recall, the broad idea behind it was not at all difficult to understand, but the legislation was so dense that only tax specialists really understood how it worked. Over the years, the scheme was modified by successive Finance Acts and became even more complicated. I am sure that I am not alone among taxpayers in having had the greatest difficulty in knowing whether I have unwittingly fallen foul of the rules of the accrued income scheme when I complete my tax return.
	When I saw that the rules had been rewritten, I looked at them again. Noble Lords will find them in Part 12 of the Bill. Sixty-seven clauses are spread over 30 pages. The rules may well be written in more accessible language, but I do not believe that it is any easier to grasp their practical application. This is but one example of highly complicated rules that remain beyond the comprehension of the vast majority of taxpayers, and we should not put up with that. Conservative Chancellors have always had an ambition to create simple tax law. At Third Reading in another place on 20 February 2007, my right honourable friend Mr Kenneth Clarke, said:
	"When I was Chancellor, I tried to follow a practice that I thought I had acquired from watching Lord Lawson of Blaby when he was Chancellor of the Exchequer. His principle was that taxation should be as simple as possible, with exemptions and exceptions as limited as possible ... while still raising the revenue that one needed".
	I am not sure that all Conservative Chancellors succeeded in their aim of simplicity—there was certainly a fair amount of difficult anti-avoidance legislation before 1997—but their hearts were, I think, in the right place. That is in stark contrast with the current Chancellor of the Exchequer who has genuinely created additional complexity through a whole range of special reliefs and incentives that are then buttressed by anti-avoidance provisions of equal or greater length to stop those reliefs or incentives being used in the way that only the Chancellor knows they should be used or applied in the first instance. My right honourable friend Mr Kenneth Clarke continued:
	"I fear that the present Chancellor does not have the same instincts. He is a micro-manager, and he keeps introducing more complexity into the policies of taxation, which the rewrite project must then turn into plainer English".—[Official Report, Commons, 20/2/07; col. 221.]
	This draws out two issues. The first is the increasing complexity of our tax code. The second is that almost as soon as a bit of the tax code is rewritten, it is often replaced by something more complicated and expressed in terms which are less simple, and requiring a further rewrite in due course.
	Do the Government believe that they have made sufficient progress in drafting new tax legislation in the spirit and style of the rewrite project? If that is not happening, the project will become like painting the Forth Bridge. Worse still, if the project seems endless, it will not attract the people of the calibre that have been involved to date—in particular the bodies required to scrutinise the draft—if the project seems endless.
	The root of the problem is the Chancellor's approach because he does not seem to embrace simplicity as an aim in tax legislation. I have asked Ministers in this House many times if the Government are committed to achieving tax simplification. The response I have had from the Minister's predecessors is that complexity has to continue because of the constant need to do battle with those who seek to avoid tax. And we know from the announcement earlier this month as well as at the Pre-Budget Report that the upcoming Finance Bill will contain another large dose of anti-avoidance legislation. Will the Minister stick to the line that we need complexity because of tax avoidance or will the Treasury open its mind to the possibility of a new way forward?
	We believe that there is a different way. It requires a completely different mindset about the tax system. It would certainly require a self-denying ordinance on using tax as an instrument of economic micro-management. It may also require a different, purposive style of legislation and might also require—as the noble Lord, Lord Newby, pointed out this evening—a different approach to anti-avoidance; namely, a general anti-avoidance rule. There is no doubt that these are difficult issues but they are worthy of examination.
	My noble and learned friend Lord Howe has long campaigned for a sister project to the tax law rewrite project; namely, the tax structure review project. He has the backing of the Tax Law Review Committee, the Institute for Fiscal Studies, the Chartered Institute of Taxation and of the Institute of Chartered Accountants. The recent report by the Tax Reform Commission chaired by my noble friend Lord Forsyth of Drumlean recommended the creation of an office of tax simplification to sit alongside and extend the work of the tax rewrite project.
	I do not underestimate the difficulty of such a task. The transition from our present body of tax law to one based on principles of simplicity is an awesome task. But I believe that it is in the interests of the UK economy for us to attempt to achieve it. In their submission to my noble friend's Tax Reform Commission the accounting firm, KPMG—in which, I remind noble Lords, I was a partner for many years—said that the increasing complexity and reducing certainty of the UK tax system was gradually making the UK a less competitive location for industry. We must not let our tax system, on top of our high tax rates and our increasingly aggressive tax administration, act as a drag on our competitiveness.
	I conclude by reiterating our thanks to all those involved with the rewrite project—those in Parliament, the Treasury and HMRC and those bodies which comment on the drafts. As the Minister said earlier, another rewrite Bill, this time on corporation tax, is already well advanced. I shall not say that I am looking forward to its arrival but I am certainly grateful to the rewrite team for its efforts.

Lord Low of Dalston: moved Amendment No. 68A:
	Schedule 4 , page 76, line 13, leave out paragraph (b)

Lord Best: My Lords, this amendment seeks to reduce youth homelessness, remove disincentives for young people to leave hostels and supported housing and to get jobs, and to enable vulnerable young people to obtain and retain somewhere to live. It would achieve those results by moderating the impact of the controversial single room rent, in future to be called the shared room rate, which limits the amount of housing benefit for those under 25 and creates a shortfall between what a tenant must pay in rent and the benefit they receive.
	The Government's overhaul of the housing benefit system, with the introduction of local housing allowances after proper evaluation of its Pathfinders, is very welcome but, in respect of younger people, the arrangements continue to be flawed. I hope to demonstrate that the Government's insistence to date on retaining the highly problematic shared room rate is based on a misunderstanding of the ways in which the private rented sector is now working.
	The amendment's progress has exemplified very well the revising role of this Chamber. Noble Lords have brought their knowledge and presented expert evidence from concerned organisations outside this House—in this case, Shelter, Citizens Advice, the Scottish Council for Single Homeless, the YMCA, Centrepoint, the Foyer Federation, the British Property Federation and others. The amendment also takes account of discussions in the other place and represents a compromise from the amendment proposed there.
	After the Committee stage provided the opportunity for a detailed discussion with a powerful speech from the noble Earl, Lord Listowel, and support from the noble Lord, Lord Oakeshott, and others, and after a helpful meeting with the Minister, I am returning to the issue with some hope of persuading him that it would be entirely sensible for the Government to take this amendment on board. I am encouraged to be optimistic by hints from the relevant government department—the Department for Communities and Local Government—which is responsible for homelessness policy. Earlier this month, that department published its policy briefing, Tackling Youth Homelessness. This draws attention to the problems created by the single room rent and concludes:
	"The Government is currently looking at this issue in the context of the Welfare Reform Bill".
	In the hope that the Department for Work and Pensions may be able to assist the Department for Communities and Local Government on this, perhaps I could spell out the reasons why I believe that the objections to this amendment are unfounded. It is said that if housing benefit covered the rent for a self-contained flat, those under 25 would reject shared accommodation and go for the more expensive option of their own flat. This would not only cost the state more but would put the individual deeper into the poverty trap, with a level of benefit that they could not match if they got a job. Moreover, it would mean that those on benefit were enjoying higher housing standards than most young people in work, the majority of whom are in shared accommodation.
	This analysis misunderstands the realities of the housing market. It is possible for someone on housing benefit to obtain shared accommodation only if landlords let this form of housing to housing benefit claimants. In some areas, there is no tradition of shared lettings—for example, in parts of Scotland and in many rural areas—so such accommodation simply does not exist. Elsewhere, where there are such lettings, these are seldom available to those on benefit. In a recent Shelter survey of landlords in Brighton, only 15 per cent were willing to let to anyone on housing benefit, let alone to those under the age of 25. In most places where landlords are letting shared housing to a group of young people, there are plenty of students and young professionals needing accommodation, reflecting the decline in the number of first-time buyers in today's overheated market.
	As a father of four young people who have all occupied shared accommodation in the private rented sector in four different places, both while at and after leaving university, I am very familiar with this market. Landlords like these tenants because parents such as me can be required to act as guarantors of the rent and will often help with a deposit and rent in advance. By contrast, landlords do not want the risky prospect of someone on housing benefit, particularly if that very low-income tenant faces a shortfall between his rent and his benefit. Many landlords blatantly declare, "No DSS"— "No DWP" has not yet caught on—while the others are very likely to deploy the same policy without announcing it. There are other factors relating to the supply of shared housing for benefit claimants.
	Becoming part of a group of flat-sharers is natural and easy for my children and their friends. It is utterly different for the lone individual—someone leaving prison, leaving a violent partner or leaving specialist accommodation. Where an existing group of tenants is looking for a fellow housemate or sharer, the Shelter survey shows that only 7 per cent would ever consider, let alone accept, a housing benefit claimant to join them.
	Meanwhile, there have been big changes in the private rented sector over recent years, as research at York University has shown. The number of lettings in the old HMOs—houses in multiple occupation—has declined; many have been converted into self-contained flats. The Housing Act 2004 is now beginning to bite with its requirements for higher health and safety standards for HMOs, so the current decline is likely to accelerate. Conversely, there has been an explosion in the development of small flats through the phenomenal growth of the buy-to-let market. Saturation has been reached in some towns and cities, with small self-contained flats standing empty but beyond the reach of the under-25 year-olds, however great their needs, because of the shared room rate restriction.
	Do the statistics confirm the dearth of available shared accommodation for those on housing benefit? The answer is a resounding "yes". After the introduction of the single room rent a decade ago, the pressure to go into shared housing would lead one to expect a rise in the numbers moving into this kind of accommodation, but the facts show the exact opposite. Numbers have fallen dramatically from 33,000 people in 1997 to about 12,000 today. In part, as the noble Lord, Lord McKenzie, suggested, this may reflect the fall in the number of unemployed young people, but the fall in shared lettings to housing benefit claimants also comes at a time of increased homelessness, which strongly suggests that those at the bottom of the economic ladder simply cannot find any shared housing for which they can obtain the requisite housing benefit.
	Helpfully, the definition used for the new shared room rate for the local housing allowance is broader than for the single room rent in the past, but the DWP's research in the local housing allowance Pathfinder areas shows that, in fact, this well intended change has not made any difference. While there are self-contained flats with the level of housing benefit capped in the new scheme at the median, preventing any extravagance by tenants, shared housing, however it is defined, is not there for claimants to find.
	What about those who are already in a flat, paying their own way, who lose their job? Because of the shared-room rate, they will be expected to downsize into shared housing while they seek a new job. Since we know that the chances of finding such housing are remote, they will probably have to stay where they are and face shortfalls in their rent, which will virtually halve their income from jobseeker's allowance. This, of course, is a recipe for arrears, eviction, then homelessness. The chances of getting back into work are dramatically reduced by this unreasonable and unrealistic benefit restriction.
	What would it cost to sort this out? The Government accept that £20 million is about right for abolishing the single-room rent, provided the change does not increase demand. Out of a total budget for housing benefit of more than £12 billion, this figure is not too significant. However, Amendment No. 81 recognises that the Government do not want to go the whole way yet in removing the limitation entirely, so this amendment goes for a compromise by confining the change to those who are aged 21 or over. The Minister agrees that this reduces the headline figure to £10 million, but he argues that 21 is an arbitrary age.
	There are logical grounds for using 21 as the age when the position might change for claimants. The minimum wage goes up at age 22, and at present the single-room rent itself uses 21 as a cut-off for a special exemption that allows those leaving care to go into self-contained housing. Care leavers would not lose this entitlement after age 21 if the amendment were accepted. I would add that using the half-way house of age 21 would limit the Government's exposure to the risk of higher costs. It allows the ground to be tested before moving on to complete abolition of this restriction on benefit if the results are positive.
	Even if the change costs more than the £21 million estimate, account must be taken of the savings and benefits as well. Leave on one side the relief of homelessness and an end to the miseries of sofa surfing, which makes getting a job so difficult, purely considering the cost-benefit equation, the amendment would have some significant offsetting gains. Currently the inability of young people to move out of specialist housing, hostels and supported accommodation means they unwillingly engage in bed-blocking—taking up places, which others desperately need when they are ready to move out. As the YMCA has explained to us, it costs £350 per week to retain people in housing with specialist support. The cost to the state of covering in full a rent of, say, £100 per week, would be far, far less. By enabling one person who is ready for independence to move on, the providers of supported housing can take in one more homeless single person to go through the process of support and training. This problem of expensive bed-blocking is affecting many of the organisations taking in homeless young people. The amendment would have the very great value of removing this major barrier to preventing those under 25 moving onward and upward.
	I apologise at this late hour for laying out my case in some detail. I tried to marshal the arguments that will lead at last to a reform that will change the lives of many thousands of young people unable to secure a place to live. I know that it is late, but unless the Minister feels able to give some hope of movement on this one, I shall test the opinion of the House. I beg to move.

The Earl of Listowel: My Lords, I strongly support my noble friend's amendment. It can be difficult for a young person to find a home. Let us take for example a typical group of young people from Centrepoint. A 17 year-old tells me that when she first moved out of home she moved into a bed and breakfast in Earl's Court. There was no lock on her door, and a man in his 40s kept hanging around immediately outside it. An 18 year-old tells me that he was placed in a bed and breakfast after leaving custody. No support was offered and he soon found himself on the street.
	We are discussing over-21s now, yet when the Centrepoints, YMCAs and foyers cannot find move-on accommodation for their older young people then they cannot offer support to their younger ones. They are silted up, as the noble Lord, Lord Best, said. The YMCA states that it cannot find move-on accommodation for 35 per cent of its young people.
	I do not wish to patronise young people in their early twenties; three-quarters of those in employment share with other people. Some of those currently out of work will find it difficult to share. For many, that will be due to shortage of supply, while for others it will perhaps be due to a poor upbringing that leaves them ill equipped to co-operate with others. Of those who find a flat, many will have difficulty managing their money. The single room rent will exacerbate those problems; the young person's tenancy may collapse, and they may be crushed by having failed in something in which they had so deeply invested themselves.
	Critically, the DWP's own research report No. 243, Research into the Single Room Rent Regulations, published in 2005, highlighted:
	"The restrictions that the SRR places on young claimants' ability to access private rented housing is preventing many from finding any private rented sector accommodation within their means. This, combined with the widely reported reluctance of many landlords to let to young people, appears to have resulted in a situation where many young people enter informal lettings or end up using 'friends' floors'".
	The noble Lord, Lord Skelmersdale, made that exact point at Second Reading and it has been made again this evening.
	We often do a poor job in this country of nurturing our children. The behaviour of some of them leaves our rate of child custody high above those of our neighbours. This February, we have the highest recorded number of children in custody of any February. I strongly support this amendment, which would also benefit young people in care whose exemption runs out at age 22. I am particularly keen to be reassured that the Department for Work and Pensions and the Department for Communities and Local Government are co-operating closely on enabling young people to gain a secure home base so that they can find and sustain work and become fully independent adults. Will the Minister consider meeting the noble Baroness, Lady Andrews, his opposite number from the Department for Communities and Local Government, soon to discuss this matter? Were it helpful, I am sure that my noble friend and I would be glad to attend such a meeting. I strongly support the amendment, and I hope that the Minister will accept it.

On Question, Whether the said amendment(No. 81) shall be agreed to?
	Their Lordships divided: Contents, 22; Not-Contents, 43.

Lord Skelmersdale: My Lords, in Committee we had a wide-ranging and reasonably productive debate about housing benefit being paid directly to the landlord, as happens in many cases. We established that housing authorities are expected to investigate whether a claimant can indeed handle their finances if a particular case is brought to their attention. That is clearly a step in the right direction, but it does not go far enough.
	The obvious person to identify whether a claimant can manage their housing benefit sufficiently well to avoid falling into arrears is the landlord. However, it is likely that the landlord will not even know that his tenant is in receipt of housing benefit and so will not know that informing the local housing authority might be helpful. How do the Government intend the notification procedure to work without increasing landlord awareness of both the possibility of intervention and who among their tenants is a benefit recipient, the latter being a significant infringement of privacy and therefore impractical?
	The amendment would make it the responsibility of the housing authority to make sure that recipients are indeed capable of handling their finances. If they do not, we run the risk of letting vulnerable claimants sink into arrears and face eviction, which is notthe best way of introducing them to financial independence, which is the whole object of the exercise and on which we on these Benches agree with the Government. The question then is how best to pursue that policy, given the shortage of available private sector housing for people on housing benefit. I hope that the Government will consider the amendment seriously. The housing authority is the obvious body to monitor the benefits that it pays out. Non-governmental organisations have an important role to play in supporting recipients and highlighting problems, but the responsibility for that should not be placed at their door. We really need to know where we are going and what the result will be. I beg to move.

Baroness Morgan of Drefelin: My Lords, I am delighted to have the opportunity to discuss the amendment further this evening. Clause 36 provides powers for prescribing the manner in which housing benefit is paid to all types of tenants. We require that power to allow us to specify the payment method for certain categories of social housing. Before I respond to the amendment, I will clarify for the House once again what the Government's intentions are in the social sector. It is a priority for the Governmentto build financial inclusion and to encourage individuals, where possible, to take responsibility for their own affairs. One way of achieving that would be to enable customers in the social sector to take responsibility for paying their own rent. However, we realise that this may be difficult for some customers. So, as we have publicly committed, we will proceed cautiously with any reform of the social sector, ensuring that proper safeguards and support mechanisms are in place.
	In the private sector, we believe that a great many customers are ready to start managing their own payments, which is why one of the key features of the local housing allowance is that, in most cases, housing benefit will be paid to the customer. However, we will not force that responsibility on to those customers who are unable to exercise it. There will be safeguards to protect those customers, so that local authorities can determine whether the housing benefit should be paid to the landlord. This amendment would enable regulations to be made that would require local authorities to put every new customer through a long and potentially complex assessment procedure. The amount of information that all customers would have to provide would greatly increase. Much of the information would have to be of a private and confidential nature. The administrative burden on local authorities would increase and could lead to slower processing times and to all customers having to wait longer for their benefit. Local authorities may also require information from a greater number of sources, thus increasing information sharing between different organisations.
	I reassure the noble Lord that the amendment is not necessary. Currently, if a local authority receives notice that a customer might be vulnerable, it is obliged to investigate. The notice may be provided by the customer, the customer's family, welfare organisations or healthcare professionals. The local authority will also pay housing benefit to the landlord if a customer is eight weeks in arrears or more and if that is in the customer's best interest. That helps to mitigate the risk of eviction, about which the noble Lord, Lord Skelmersdale, is so concerned, as it aligns with the point at which a landlord would be able to file for eviction of a customer on rent arrears grounds. In many cases, local authorities will act much earlier than that, so that if customers experience problems they will intervene. In addition, each local authority will have its own procedure to identify those customers who cannot manage their own payments, without having to investigate claims.
	Using the evaluation of the local housing allowance pathfinders and comments from the welfare organisations working with us, we will provide comprehensive guidance to local authorities. Our experience from the pathfinders has shown that the procedures in place to identify vulnerable customers are working extremely well. I hope that noble Lords will take comfort from that. Only 4 per cent of pathfinder customers have their housing benefit paid directly to the landlord because they have fallen eight weeks into arrears. A further 12 per cent have it paid to the landlord because the local authority has identified that they might struggle to manage their financial affairs. The remaining 84 per cent of customers are receiving and successfully managing their own payments. Indeed customers in pathfinder areas were more likely to report being up to date with their rent payments than those in the control areas with which the pathfinders were compared.
	I know that noble Lords are concerned about ensuring that we have a proper variation in conditions for control areas and a wide variation in locations that are used for pilots. That is an extremely important point. The processes and policies in place are working, and there is nothing to suggest that they will not do so in future. Therefore, I urge the noble Lord to withdraw the amendment.

Lord Skelmersdale: My Lords, I notice that on this occasion the noble Baroness did not use the word "overkill". I agree that the priority should be to build financial inclusion, as I said in introducing the amendment. I accept that the Government are proceeding cautiously on this. I was pleased to hear—I had not heard it before—that 86 per cent of recipients of housing benefit in the pilot areas were operating this successfully. That still leaves another24 per cent and that is the group that I am worried about—

Lord Skelmersdale: My Lords, it is getting late; my maths is never up to scratch but it is even worse than usual. I am clearly concerned about the 14 per cent and the noble Baroness is right about the possibility of their eviction. I am concerned that eight weeks seems to be rather a long time. If a landlord is not paid for eight weeks, it is likely that he will have instigated proceedings for eviction by that stage. It will be interesting to see how the pilots proceed and whether the 14 per cent figure goes down. At this time of night, there is no alternative but to withdrawthe amendment—although, even if it had been 3.30 in the afternoon, I would still have withdrawn the amendment.

Lord Taylor of Holbeach: moved Amendment No. 84:
	Clause 40 , page 33, line 4, after "information" insert", excluding patient data,"

Lord Taylor of Holbeach: My Lords, our amendments in this group are twofold. First, I would like to exclude patent data from the information that public authorities may share with each other. Secondly, I would like to ensure sufficient parliamentary scrutiny of the regulations that will govern how these data are to be shared. The aim of this clause is to allow the department to share what information it has on benefit recipients with local authorities. I hope that this will have two positive results. One is that fraud will be tackled more efficiently; after all, if a person is illegally claiming a benefit such as income support, it is possible that he is also claiming other benefits, such as housing benefit, illegally and vice versa.
	The clause should also allow a claimant to receive related benefits more easily. If they have established their eligibility for one Department for Work and Pension's benefit, sharing information may well make their eligibility for other benefits, such as disability living allowance, more apparent. However, there must be limits to this information sharing. While we are very happy that the Government are improving their ability to tackle fraud and are trying to improve benefit up-take, these measures must not infringe on claimants privacy or put confidential information at risk.
	Our first amendment is designed to ensure that patient data are not shared under this clause. By patient data, I mean health information about a claimant combined with information about their identity. Both pieces of patient data will continue to be able to be shared separately. After all, the identification of an individual as a recipient of ESA might be necessary to combat fraud. Similarly, a Jobcentre Plus in one part of the UK might want to share statistical information with another centre in a different part of the country on how many patients of a certain disability they have managed to move off benefits. What is not appropriate is that these two pieces of information are combined, so that a housing authority, for example, will be able to look at this information and know that a certain recipient of housing benefit is also suffering from a certain disability. This combination of health and identity information would be considered confidential. The exclusion of patient data is a principle that has been accepted by the Government in the Serious Crime Bill, also going through this House. I hope that the Minister will be equally amenable to the principle here. I beg to move.

Baroness Morgan of Drefelin: My Lords, I hope I can do that without going on for too long. First, I will speak to government Amendment No. 86. This is a minor amendment consequential to the government amendments to Clause 40 approved in Grand Committee. Those amendments addressed concerns raised by the Delegated Powers and Regulatory Reform Committee and the Joint Committee on Human Rights on one aspect of Clause 40, which deals with the use of social security information.
	The proposal of a new Section 7B in the Social Security Administration Act 1992 which was originally worded to enable the prescription of benefit take-up activity through regulations was amended so that such activity is now set out in the Bill. Another feature of Clause 40 is that it will enable English county council staff to perform certain social security functions for the first time, including promoting such benefit take-up by using social security information that they hold. It is in this connection that the consequential amendment is needed.
	Under Section 123 of the Social Security Administration Act 1992, it is a criminal offence for persons employed in social security administration to make any unauthorised disclosure of information.
	Clause 40(3) extends the definition of,
	"persons employed in social security administration",
	in Schedule 4 to the 1992 Act so that it applies to English county council staff. Noble Lords will be pleased to hear that it already covers DWP staff and local authority housing benefit staff. The definition currently in Clause 40(3) refers to:
	"A member, officer or employee of a county council who exercises ... any function ... specified in regulations made under section 7B".
	However, we need to reflect the fact that the functions concerned—namely, assisting and encouraging persons to claim benefit—now appear in the Bill in new Section 7B(3) and will not be specified in regulations, as originally intended. This consequential amendment therefore brings subsection (3) ofClause 40 in line with subsection (1).
	Amendment No. 84 would prevent patient data being used for a relevant purpose. Here, a "relevant purpose" means identifying persons who may be entitled to certain benefits and encouraging, advising or assisting them to make a claim for one or more of those benefits in order to encourage and increase benefit take-up.
	I take "patient data" to mean medical information or evidence provided by the customer or obtained with their consent, as these are the only data about a customer that a relevant authority will hold. I shall return to this later.
	I appreciate that the use of medical data must be subject to limitations, but perhaps I may offer the following assurances as to why this amendment is unnecessary. Any medical information obtained is classed as sensitive personal information for Data Protection Act purposes and is subject to more stringent safeguards than the use of other personal information.
	One function of Clause 40 is to enable local authorities administering housing benefit and English county councils to promote the take-up of benefits administered by the DWP. The benefits, which are listed in draft Regulation 6, paragraph (3), include benefits where the provision of medical evidence in support of a claim is necessary, such as incapacity benefit, employment and support allowance and disability living allowance. If local authorities were prevented from using medical evidence and information, that would restrict benefit take-up activity.
	Another function of this clause is to support the operation of joint teams. Joint teams bring together staff from the DWP, English county councils and local authorities administering housing benefit. They work together to visit people—primarily pensioners—to encourage and help them to make claims for the benefits and other services to which they may be entitled. Because team roles are interchangeable, patient data may be collected by local authority staff in support of the claims to a benefit administered by the DWP.
	Customers are not required to make a claim or provide evidence to joint team staff. Where they do so, it is with their consent and on the understanding that such information may be shared as necessary in support of their claim to benefit. The customers remain in control throughout and can opt to make their claim direct to the DWP or the local authority administering housing benefit if they prefer.
	As I mentioned, there are restrictions under this clause on the purposes for which an authority can use the medical evidence that it obtains. The purposes are set out in primary legislation at Section 7B(3) and concern identifying, assisting and advising in relation to making a claim to benefit. It follows that only relevant and necessary medical information and evidence would be collected in relation to such functions.
	I can further assure noble Lords that any medical information obtained is classed as sensitive personal information for Data Protection Act purposes and is subject to more stringent safeguards than the use of other personal information. The department, local authorities and English county councils are bound by the principles of the Data Protection Act in their use of personal information. As I have said previously, staff are subject to Section 123 of the Social Security Administration Act, which makes it a criminal offence to disclose information without lawful consent.
	I have set out what this clause in part enables, and the safeguards that are and will be put in place. Let me be equally clear about what this clause does not enable. It will not permit relevant authorities access to wider medical information than they have currently. They will not be able to access full medical data such as GP records or NHS databases. I wish to be absolutely clear about that because one or two noble Lords may have hinted at that on Second Reading, so it is important to put that on the record. Nor will the clause allow any patient data to be collected or shared unless they have been provided by the patient or obtained with their consent to support their claim to benefit.
	I do not want to speak at length now about Amendment No. 85 because we had a discussion about affirmative regulations. I understand that the noble Lord, Lord Skelmersdale and my noble friend the Minister will discuss this issue further. I do not want to keep noble Lords with what I am afraid to say are about three or four more pages of speaking notes. I urge the noble Lord—

Baroness Morgan of Drefelin: My Lords, I am happy to do so.
	In that case, accepting Amendment No. 85 would mean that regulations made under new Section 7B(2) would be subject to the affirmative parliamentary procedure. I have mentioned previously some of the aspects of this clause that relate to how information that is shared between relevant authorities may be used. Section 7B(2) is concerned with the processes that should be followed when certain information is received by a relevant authority from a different relevant authority.
	The draft regulations available to the House show how the Government propose to exercise the powers in subsection (2) of the new Section 7B. Briefly, the draft provides that if information has been used in relation to a claim to benefit by one relevant authority—a local authority administering housing benefit or the DWP, or has been verified by a relevant authority, including English county councils—a subsequent relevant authority that receives this information must, subject to certain safeguards, use it in connection with a claim for an award of benefit that it administers without carrying out further checks as to its accuracy.
	The intention is to ensure that if a customer has submitted information or evidence to one relevant authority, he should not have to submit the same information again to another relevant authority. This will improve the service to customers in making claims to benefit and will improve administrative efficiency.
	Making these regulations subject to the affirmative procedure would mean that new Section 7B(2) of the Social Security Administration Act 1992 would be out of line with existing Section 7A—inserted by the Welfare Reform and Pensions Act 1999. Section 7A allows for regulations to be made setting out the processes that are to be followed by, for example, a local authority which receives a claim for state pension credit. The negative procedure applies there. The Government's view is that it would be rather excessive for the regulations under new Section 7B, which are about how local authorities process claims, to attract the affirmative procedure. Certainly, this appeared to be the view of the Delegated Powers and Regulatory Reform Committee, which made no recommendation in respect of this particular provision in Clause 40. I urge the noble Lord to withdraw the amendment.

Baroness Thomas of Winchester: My Lords, I shall also speak to Amendment No. 88. Both amendments concern the remit of the Social Security Advisory Committee. Under the Social Security Administration Act 1992, draft regulations made within six months of the parent Act need not be referred to the Social Security Advisory Committee. That means that the Secretary of State and Parliament are denied the expertise of that committee when considering such regulations in draft form because many of them are, by necessity, made within six months of the parent Act's coming into effect. Parliament and, I should have thought, the Secretary of State would find such expert views extremely helpful at a critical stage when a new benefit scheme is being set up. Professor Hazel Genn's quinquennial review of the Social Security Advisory Committee recommended that this rule be abolished. In its 19th report, the SSAC stated that it was still working with the department on the implementation of the recommended strengthening of its role in relation to regulations laid within six months of an Act coming into force and that it is able to offer informal comments and advice, presumably to the Secretary of State. However, that does not mean that a report is published for Parliament to see.
	Amendment No. 88 relates to the fact that the SSAC's remit used to cover guardian's allowance and child benefit before the administrative functions in respect of those social security benefits were transferred under the Tax Credits Act 2002 to what is now Her Majesty's Revenue and Customs. The amendment would remedy this. Since 2002, this valuable committee has not been able to report to Parliament on draft regulations relating to child benefit and guardian's allowance before they pass into law. I understand that under a memorandum of understanding HMRC may seek advice from the committee but it must remain confidential. Although we would like to see all benefits administered by HMRC brought within the remit of the SSAC, we recognise that the long title of the Bill permits amendments to be made concerning child benefits and guardian's allowance only.
	The Work and Pensions Select Committee and Professor Hazel Genn's report recommended extending the remit of the SSAC. Can the Minister tell the House why the Government do not think it would be appropriate to extend the SSAC's statutory remit in the way suggested? It would greatly help both Houses of Parliament to scrutinise effectively important delegated legislation in this field before agreeing to it. We should not let this legislative opportunity go by without trying to change the remit of this important committee. I beg to move.

Lord Kirkwood of Kirkhope: My Lords, this has been departmental unfinished business for a number of years, as I know to my cost. In a previous incarnation I was part of a Select Committee that looked at this area in some detail. To an extent, it is not just unfinished business but there is credibility at stake in some respects.
	In the days of the Social Security Administration Act 1992, statutes of a social security nature were extensive and laid out in some detail. Most of the detail was contained in the primary sections of the primary legislation. Things have changed; the older I get, the more I can see the force of enabling legislation that can be fleshed out in statutory instruments and delegated legislation. The rationale in 1992 was that the department was entitled to six months' respite, if I can put it that way, because the primary legislation contained all the necessary detail to foresee what would happen in the immediate aftermath of the primary statute.
	That has certainly changed in this legislation, if it had not done before. I absolutely support the Government's perfectly understandable intention to set out the framework as it has in this enabling legislation and to back it up later with SIs and delegated secondary legislation. The whole way of developing social security statutes has changed, which everyone from the social security committee to the DWP committee and the quinquennial review under Professor Hazel Genn recognised, as did Andrew Smith. When he was Secretary for State in the last Parliament, Andrew Smith gave a clear commitment that he could see the force of how the system had changed, demonstrating a need to remove the protected six-month period to which the department was able to cleave.
	The last time that the Social Security Advisory Committee looked at this, in its 19th report, it suggested that it was making progress with the department in getting that principle accepted. It seemed that we were almost getting to the stage of saying, "Don't worry; let's try it this time with this Bill on welfare reform, and in the next social security legislation that comes along we will get the amendment to the 1992 SSAA". That Act needs to be changed to put right the situation.
	This amendment, which my noble friend moved so eloquently, makes a clear case, even at this late hour, that we should be making the change and giving the Government time to implement it as and when they feel it appropriate. That would seem the culmination of a series of iterative, evolving discussions with the department. This is the moment when we should take the chance, as it might not come again for some time, which would be a shame.
	If we do not take that opportunity, the Government are saying that they do not value the Social Security Advisory Committee's contribution to the legislative process, because some people in the pressure-group community outside are beginning to wonder whether there has been a deliberate attack on the extent of the SSAC's remit. This is one element of that discussion. The Government have to be careful that they do not undersell or diminish the role of the Social Security Advisory Committee. Amendment No. 87 would be an important signal that they understood.
	There are conditions in the SSAC's 19th annual report to the effect that if, for example, we take the six-month rule out, we could start in Committee to point to some of the regulations and statutory instruments that could be the subject of scrutiny within the six-month period. This is an important moment this evening for the Government to explain clearly whether they are going to take this opportunity that the amendment clearly gives them. If they do not take it, there will be far-reaching consequences for the Social Security Advisory Committee and all the valuable work that it does.
	Briefly, on Amendment No. 88, again the credibility of the department is being tested. The guardian's allowance and child benefit are benefits that are administered quite clearly under the Social Security Administration Act 1992, which is the pin Act of all eligibility for benefits as currently cast. The Tax Credits Act 2002 changed that. I believe that there were some misunderstandings after the 2002 legislation, because there were some very clear assurances that the consultation process with the Social Security Advisory Committee would not be downgraded in any way. Clearly it has been. As my noble friend argued eloquently on an earlier amendment, the new memorandum of understanding arrangements for the guardian's allowance, child benefit and the tax credits, which we cannot technically talk about under the Long Title of this legislation, are simply not adequate for the purpose. They are, as my noble friend said, confidential to the department. The whole model of Social Security Advisory Committee processes has been established so that SSAC members may advise Parliament. They do so through the Secretary of State, but they advise Parliament, and for a memorandum of understanding merely to advise government through HM Revenue and Customs is wholly different. It is totally removed from the ability to ensure that when we deal with delegated legislation in the revising Chamber, we have the advantage in cold print of the views and expertise of the Social Security Advisory Committee secretariat.
	Moreover, the SSAC's work is intrinsic to the statutory process. If the Minister tried to introduce secondary legislation without reference to the SSAC, there are circumstances in which delegated legislation, even if the SSAC said that it had nothing to say about it, would be flawed and subject to contest. It is, and always has been, an absolutely intrinsic part of the social security statutory process. The other thing about memorandums of understanding which I do not like is that they are entirely discretionary. They are at the behest of Ministers and cannot be required by anyone outside Revenue and Customs bureaucracy.
	Perhaps one of the most damaging things about memorandums of understanding is that they do not admit of external consultation. No one else can do as SSAC members do when they formally consult under the SSAC normal model for social security scrutiny. SSAC members can talk to the pressure-group community, academics and others. Indeed, they have a very good reputation for doing so. People know why they are being asked the questions that the SSAC asks them, and they know that the information is being put to good purpose for parliamentary scrutiny which, under the memorandum of understanding role suggested in relation to the guardian's allowance, child benefit and the tax credits, the SSAC cannot currently do.
	Finally, assurances—I certainly took them to be assurances—were given in the aftermath of the Tax Credits Act 2002 that these things would eventually be put right. Assurances were given that the consultation would be at least equivalent to the SSAC social security model through the memorandum of understanding. I do not believe that that has happened.
	For all these reasons, the credibility of the department is at stake. I know that the Minister is too tough a cookie to be bullied by his Treasury colleagues, who say, "Hands off tax credits. Customs and Revenue are not having anything to do with this namby-pamby consultation that DWP Ministers are saddled with. Get out of my face; I don't want any of this round my neck". I am sure that he is able—at least I hope that he is big enough—to stand up to that kind of pressure, because this is a serious issue. If this is the shape of things to come and Treasury Ministers move on to higher and better things, the social policy that we may see coming from the Government for the remainder of this Parliament will start taking on that hue, rather than going back to the tried and tested systems.
	I do not need to tell the Minister that the Social Security Advisory Committee is a cherished part of the consultation process in social security law, as it has been for years. If the Government do not send out the right signals in addressing these two amendments appropriately, there will be worries out there that that commitment is being eroded, if not being lost altogether.

Lord Skelmersdale: My Lords, inclined as I am to agree with the thinking behind these amendments, it is only fair for me to say that Section 173(5) of the Social Security Administration Act is a sensible procedure in many cases, but not for this Bill. If a regulation is to be enacted within six months of the Bill, it is to be expected that draft regulations and so on will have been fully scrutinised and debated by both Houses and that concerned parties will have had an opportunity to comment. No doubt words such as that will appear very shortly from the Minister's mouth. But we have seen from the lengthy and sometimes rather confused debates on certain clauses in Part 1 that there is much about the regulations that is still not clear, despite the best attempts of the Government to give us advance sight of as much material as they can and their helpful attempts to explain the points that we have raised.
	It is unfortunate that it is only now—nearly halfway through the Bill's progress, after it has already passed through another place—that we are making any real progress in unpicking the confusions that remain. I therefore think that there is a strong argument for making an exception for this Bill, which, as is repeatedly said, makes extensive changes to the system of benefits for disability, and for the Minister to assure us that all the regulations that are needed to implement its provisions are fully consulted on by SSAC.
	As far as Amendment No. 88 goes, the problem is that great chunks of social security have been pinched by the Chancellor of the Exchequer and the department is a pale shadow of what it once was. The Chancellor and his team have a different way of looking at things. I agree with the noble Lord, Lord Kirkwood, that it was quite wrong at the time to cut out SSAC and it is just as wrong now.

Lord McKenzie of Luton: My Lords, I start by thanking the noble Lord, Lord Oakeshott, for his kind comments and by trying to address the point that he raised about the timing of amendments. I cannot commit that this will be done tomorrow without talking to officials, but I understand the need to get it done as soon as we can so that people have a real opportunity to focus on them and be satisfied that they address the points that we maintain they will.
	The Social Security Advisory Committee doesan important job very effectively and my right honourable friend the Secretary of State, John Hutton, and other Ministers meet the committee on a regular basis. From our perspective, the relationship is dynamic and fruitful. The committee's informal and formal scrutiny of the majority of amended regulations before they become law and its meetings with officials and Ministers about proposed policy developments have helped successive Governments make better rules under which benefits are claimed.
	Amendment No. 87 would remove the provision in Section 173(5) of the 1992 Act which precludes referral to SSAC of regulations made within six months of a relevant enactment. Following recent dialogue with the committee, Ministers reached the view that this limitation should remain in place. The SSAC's current remit does not extend to scrutiny of draft regulations made under powers recently enacted by Parliament. "Recently" means the long-established period of six months following commencement ofthe relevant power. Referring such regulations to the committee for further scrutiny would jeopardisethe timely implementation of the policy set out in the legislation so recently approved and scrutinised by Parliament. This amendment does not sit very comfortably with this Bill. It follows extensive consultation on our plans for welfare reform where we have published the key draft regulations to which the public, SSAC and the Disability Employment Advisory Committee have had access and where we have updated the regulations document before this Bill was placed before your Lordships' House.
	Finally and very importantly, the amendment would pre-empt the outcome of the non-statutory trial which SSAC and the department are currently operating, which aims to provide the committeewith more comprehensive information on the Government's intentions. The trial involves the Bill now before your Lordships, the Pensions Bill and the regulations that may be proposed if these Bills are enacted. It offers increased scope for SSAC to make its views known at an earlier stage than in the past. When the trial is complete SSAC will produce a report and the Government will decide what implications there may be for SSAC's future functions. The Government will of course make public their conclusions.

Lord McKenzie of Luton: My Lords, I confirm what I have said: the Government will make public their conclusions. I hope that noble Lords will accept that in the context of what is going on, it would be pre-emptive to proceed with this amendment. It is right that this process be concluded and for the Government to publish the conclusions of the report.
	Amendment No. 88 would place a statutory duty on HMRC to consult with the SSAC on secondary legislation relating to guardians allowance and child benefit. The fact that SSAC have a statutory role in relation to the benefits system does not read across to the tax system and other HMRC business. The Government have consistently made it clear that it is not necessary or logical to take new statutory powers. The amendment appears to ignore the fact that SSAC already has a channel to put its advice to Treasury Ministers on a range of HMRC business, including guardians allowance and child benefit. The amendment ignores the existing Memorandum of Understanding, which sets out how HMRC and SSAC conduct their business. I should emphasise that HMRC and SSAC willingly accepted the terms and conditions of the memorandum only after months of discussion and debate between the two parties. The noble Lord expresses some surprise at that contention.

Lord McKenzie of Luton: My Lords, I am sure that there are some people who would take a different view. I am expressing the view I believe to be correct. This was entered into by agreement between the two parties. Treasury Ministers are able to obtain the freely and frankly expressed views and the expertise of SSAC. Treasury Ministers take the view that the disclosure of SSAC's advice would be likely toinhibit the free and frank provision of advice orcould prejudice the effective development of policy. The confidentiality of that advice recognises thatthe Chancellor has responsibility to deliver the Government's aims of delivering a single system of support designed to make work pay and of reducing child poverty. He also has to make those decisions in the context of his overall economic responsibility as part of the Budget process.
	The proposed amendment would be made to a DWP Bill and ignores the opportunity for HMRC and the SSAC to determine, by mutual agreement, the content of the MoU and the way in which arrangements covered by it will operate. The memorandum is about to be reviewed, with both sides agreeing the terms of that review. It would be pre-emptive to press this amendment in light of that situation.
	I hope that these explanations have totally convinced noble Lords and I urge the noble Baroness to withdraw the amendment.